Michael is mortally offended that Phyllis gets to be Santa instead of him, to the point where he's fully prepared to ruin the office Christmas party. Like there's ever been a Dunder-Mifflin Scranton Christmas party that hasn't been ruined. But when Michael tries to complain about it to David Wallace, the CFO talks out of school to Michael for what may be the last time: the company is being sold, and the bosses are out. Michael takes this to mean that the branch is doomed as well, but when he -- and everyone else -- get Wallace on the phone, they are informed that the new owners will want to keep the branch-level employees around. We can of course count on Michael to proclaim it a Christmas miracle.
In other news, Andy has been giving Erin, his Secret Santa recipient, the literal Twelve Days of Christmas gifts, which she hates. See, they keep attacking her. Also, Oscar has a crush on a warehouse guy, and tries to lay the groundwork for a relationship despite Pam's attempts to facilitate. But everyone gets a happy ending, complete with twelve drummers drumming.
With Jim at his side, Dwight wishes the bullpen a merry Christmas in his typical authoritarian manner. After a brief talking-head in which he says his diabolical plot is on hold for the holidays, we're back in the bullpen for the unveiling of the tree. Ryan says he's been to 30 Rock for that, and this is nothing like that, even adding a Grinchy, "Uch." Then the tree is unveiled, and no one is impressed, partly because it's not decorated and because it's what I used to call a "permanent" tree. "We're supposed to applaud you for pulling a giant diaper off a fake tree?" Stanley asks. "This was a successful unveiling!" Dwight barks. "Go back to work! Merry Christmas!" I'm so glad they're still the party planning committee. I was afraid they'd forgotten.
From the front of the bullpen, Erin, with bandages over two wicked slashes down her face (looks like she nearly lost an eye, in fact), begs her Secret Santa, whoever it is, to please stop sending her the Twelve Days of Christmas. "My cat killed a turtledove. The French hens have started pulling out my hair to make a nest." "What psycho would send that as a gift?" Kelly asks, and hugs Erin. Andy, who was looking uncomfortable throughout this speech, says, "Is it my fault that the first eight days is basically 30 birds?" We get to see Erin discovering seven swans a-stranded in her car in the parking lot.
Enter Phyllis, dressed as Santa Claus. Apparently this has been a dream of hers for a long time, and she's pretty choked-up about it in a TH. During her interaction with the people in the bullpen, Creed asks, "What if you've been bad?" "Then nothing but a lump of coal for you," Phyllis says. Creed presses, "What if you've been really, really bad, more evil and strictly wrong?" Jim says they covered it. That's what he thinks.
Dwight says his Secret Santa has been sending him pieces of something that he's been trying to put together, which is similar to his idea for catching Osama Bin Laden. "He would assemble it to find himself in jail," Dwight smirks.
In the conference room, Pam notices that Oscar seems distracted, and see that it's because he's watching a new, blond warehouse guy playing football in the parking lot. "Go, Oscar," Pam THs. "Go, gay warehouse guy!" Go, Pam. Go over there, and stay away from Oscar and the warehouse guy. Seriously, just go.
Michael finally enters in his own Santa suit, in character, and when Pam points out that Phyllis has it covered, he demands, "What the hell is going on?"