Elsie and Peaches are two little soft toys who are best friends with a little girl named Rosie. It's Christmas time and Rosie, Elsie, Peaches, and their little mouse friend, Michael, are excited to see Santa and his elves. Elsie, Peaches, and Michael stay up all night hoping to see them. Unfortunately when the elves see Michael the mouse, they make some unkind judgements about him. They become frightened and they faint, which leads to an adventure with Santa and a lesson for the elves.