Christmas Evil

In suburban New Jersey, on Christmas Eve 1947, a young boy named Harry Stadling, his younger brother Phil, and their mother watch as a man dressed as Santa Claus comes down their chimney, eats the milk and cookies they provided for him, and leaves presents under the tree. Later, when Harry gets out of bed to investigate some noises he heard downstairs, he sees his mother being sexually groped by the Santa man. Traumatized, Harry rushes up to the attic and cuts his hand with a shard of glass from a shattered snow globe.
Thirty-three years later, an adult Harry works in a low-level position at the Jolly Dreams toy factory, where his colleagues consider him a "schmuck" and make fun of him. At home, he has taken it upon himself to become the next true Santa: he sleeps in costume, and his apartment is resplendent with Christmas décor. He spies on neighborhood children to see if they are being "good" or "bad" and keeps detailed records of their behavior.
Harry's coworker Frank asks Harry to cover his shift on the assembly line in order to be with his family. However, on his way home from work, Harry sees Frank drinking with friends at a local bar. Distressed by the man's duplicity, Harry breaks one of his dollhouse figures while humming Christmas tunes. The following day, he cancels Thanksgiving dinner with Phil and his family. Phil has been constantly angered by his brother's odd behavior, while Phil's wife Jackie is more sympathetic.
At the company Christmas party, the owner of Jolly Dreams, Mr. Wiseman, announces that the company will donate toys to the children of the local hospital, provided production increases sufficiently and the employees contribute with their own money. Mr. Fletcher, one of the company's high-ranking executives, introduces Harry to new training executive George Grosch, who devised the donation scheme. Harry is angry and disgusted at both for not really caring about the children. That night, he fills bags with toys he stole from the factory and other bags with dirt.
On Christmas Eve, while glueing a Santa beard to his face, he enters a fugue state that has him convinced that he truly is Santa Claus. Garbed in his Santa suit, Harry starts doing his rounds on the van that he decorated with a sleigh picture, and that he believes to have been trained by Santa Claus's reindeer. He first sneaks into his brother's home and delivers toys for his nephews; then leaves a bagful of dirt at the doorstep of "bad boy" Moss Garcia. Later, Harry drops off toys at the hospital, where he is greeted cheerfully by the staff.
On the street, Harry is taunted by a group of teenagers leaving Midnight Mass, and he brutally murders them in a fit of rage with a toy soldier and hatchet. Later, Harry is welcomed at a neighborhood Christmas party, where people think he is just some harmless Santa impersonator; he dances and cheers everyone up and makes sure the attending children know they will have to be good boys and girls to receive their gifts. He then breaks into Frank's home, kills him with his sack of gifts and a Christmas tree star, and leaves toys behind for the kids. He makes a run for his van just as Frank's wife finds her dead husband.
On Christmas morning, his Santa suit disheveled and dirty, Harry returns to Jolly Dreams and activates the assembly lines, breaking all the toys, which he considers subpar. Later, his van becomes stuck in the snow on a beautifully decorated street with plenty of lights, sending him further into a delusional state. The residents shortly recognize him as the murderer and form a torch-bearing mob to pursue him.
Harry manages to free his van from the snow and drives to his brother's house, where Phil has already started to suspect something is seriously wrong with his brother. Harry confronts Phil, accusing him to have been the root cause of his childhood trauma, as Phil was the one who revealed to Harry that the Santa they saw was actually their father. Phil quickly realizes that Harry is the homicidal Santa from the news, and chokes him unconscious. He loads him into the front seat of the van; Harry soon regains his consciousness, punches Phil and drives off again. The angry mob forces him and his van off a bridge; the van is shown to be flying off toward the Moon as a voice-over reads the end of "The Night Before Christmas".