An old friend of Rich's, who is a girl, returns to Port Washington. Dana becomes concerned and a little jealous when Rich seems to have a lot more fun with her. Frank's cousin is passing through town and calls in, to Frank's chagrin.

When Lilly recognises JT as Santa in the mall she becomes disillusioned and decides she no longer believes in Santa. Frank and Carol decide to convince her that she is wrong. At the same time, JT tries to make up with Sam.