Eric gets permission to have a Christmas party in the basement. Red gives Eric money to buy the family Christmas tree, but the guys chop down a tree on the interstate and keep the money for beer. And Hyde wants to buy a special Christmas gift for Donna.
The episode begins with Sarah being a Bentley and the gang hanging out in the basement watching How The Grinch Stole Christmas!. Later, Eric asks if he can have a Christmas party in the basement, and surprisingly, Red says yes. when Eric asks for money for the party (for beer, actually) Red gives him $40 for the Christmas tree and says he can keep what money's left over. However, the gang decides to chop down a tree at the side of the road in order to spend all the money on beer.
At work, Bob asks Red if he'll stay and work at the store on Christmas Eve. Bob says that since all the other stores are closed, some last-last-minute shoppers might swing by. To Red's dismay, Kelso ends up being the only one to show up, and he buys a set of hot rollers for Jackie and plays few rounds of Pong with Red, who ends up purchasing that game for himself.
Back at the house, a jealous Laurie pours rum in the punch Kitty made for Eric's party. However, no one drinks it except for Jackie and three of her friends. Upstairs, two state troopers barge in to the party to inform Red and Kitty that their Christmas tree is a stolen one. Red then stops the party downstairs and takes Jackie and her friends home, and kicks everyone else out. Hyde then gives Donna her gift, a picture of the two in 5th grade. A jealous Eric then proceeds to give Donna White Shoulders perfume, the gift Hyde wanted to buy her but couldn't afford.
- Topher Grace as Eric Forman
- Mila Kunis as Jackie Burkhart
- Ashton Kutcher as Michael Kelso
- Danny Masterson as Steven Hyde
- Laura Prepon as Donna Pinciotti
- Wilmer Valderrama as Fez
- Debra Jo Rupp as Kitty Forman
- Kurtwood Smith as Red Forman
- Tanya Roberts as Midge Pinciotti
- Don Stark as Bob Pinciotti
Special Guest Star
- Marion Ross as Bernice Forman
- „Yes, nothing says Christmas like a big, green, Grinch ass!”
- „You know what my favorite Christmas gift of all time is? Lite Brite! It's fun making things with Lite Brite”
- Red says that he sold two items that night, but only Kelso visited the store. The reality is that he sold himself the Pong game that he and Kelso were playing. Because Kelso beats everyone at the game, he and Red later modify the game to make it harder with smaller paddles.
- The type of perfume that Eric get's for Donna is called "White Shoulders."
- In the scene where Kelso jumps over the couch to talk to Laurie, he was only supposed to jump onto the couch, but Ashton Kutcher's feet slipped on the cushions and hit his shins on the table, garnering a huge laugh from the audience. This is why Laurie is holding back laughter when Kelso starts talking to her.
- This is the last episode to feature the '76 license plate during the opening and end credits.