Carl is sleeping in his room when he is awakened by a robot that claims to be the Ghost of Christmas Past. He has come to show Carl what Christmas was like for Carl in 1968.
A flashback narrated by the Ghost shows Carl as an 8-year old boy (severely balding even as a child, and wearing a child-sized version of his usual wifebeater tank top and blue sweatpants) accompanied by Carl's Dad and a sad-looking "Christmas tree" decorated with empty beer bottles and cans. Young Carl gets ready to open his only present from his father, which he hopes is a "new mommy", but instead finds out is a piece of Berber carpet ("That's an industry term!"). Young Carl tries to make the best of his gift, pretending it to be a "flying magic carpet", to which his father tells him not to get too attached to it, as it's about to be "magic flying dinner". Carl thinks his father is joking, but his father explains how it's edible once you boil it, "so the glue gets soft." Carl's father then looks at his watch and declares it's time to go to work and for Carl to put on his work-boots and respirator. Carl begins crying as his father demands he dress for work, shouting about how he "had to pull a lot of strings to get them to hire an 8-year old", when suddenly an enormous robot foot stomps the room and lasers shoot everywhere.
Carl acknowledges that he remembers eating carpet, but not so much the lasers and robots. The Ghost claims that the reason he doesn't remember "The War of Man Versus Machine," which raged through the early 1970s, was because at the time it was only a prophecy, but in the future, the past has occured. Carl reminds the Ghost that it's not Christmas at all, but in fact February. The Ghost seems perturbed by this, but leaves in a cloud of smoke, saying he'll be back.
Master Shake shows up to tell Carl that his pool is full of blood. Frylock determines it to be elven blood. The ghost arrives and informs them all that he is responsible for the blood. Frylock asks him why, and he says it can all be explained by a very long and confusing story, so he advises everyone to "get a snack" first. With a puff of smoke, the Ghost explains how (in a nutshell) thousands of years ago, an ape named "Sir Santa of Claus" had enslaved elves to make toys, then became lost and built his house in the exact spot where Carl's house currently sits. Meatwad is frightened that the whole story is true, but Frylock assures him that it's not true. The ghost changes his story, saying Santa is now a machine. Frylock reminds the ghost that he still hasn't explained the elf blood, and he says that it was due to the "great circuiting". He then goes back into another story, and talks to the night, ending with an explanation of where babies come from—for machines. Everyone else has fallen asleep, but Meatwad is still engaged in conversation with him. When they awaken Frylock, they reveal that Carl's house was built on elf graves, and the ghost is haunting it because Carl desecrated the land. Therefore, the only way to end it is for Carl to give himself sexually to the Great Red Ape. Carl is uninterested in this option, declaring he's not going to "get humped by a giant gorilla in space", and would rather move out instead.
He gets ready to take a shower to get ready for some potential buyers for his house, but ends up covered in elf blood. He ends up showing the house to Glenn Danzig. He explains the features of the house and the shrieking robot that comes with it, and shows him the pool, still filled with blood, which gets Danzig interested in buying the house. He asks for a price, and accepts Carl's offer of a million. He runs sprinklers which spray blood all over the front yard and house, and comes over to the Aqua Teens' house, looking for the robot. Shake, trying to sell the Aqua Teen house as part of a package deal, says he hasn't seen him, but does show Danzig their "haunted kitchen", which is Meatwad covered in a blanket with the lights flipping on and off. Danzig gets angry, threatens to kill Carl if they don't find the Ghost, and leaves.
After Danzig leaves, Meatwad tells the Ghost to come out from where he was hiding in their hallway. The Ghost says that he is freaked out by Danzig, as he is " and Shake gets angry and orders him to make the house bleed.
- This is the first episode containing language censorship.
- This is the only episode of Season 1 in which Dr. Weird is not the first character on screen.