It's the first Christmas without Grandma and a diffucult time for the family, until Grandpa decides to share a story with his ten-year-old grandson Terence. It's the story of Santa and Pete, a tale that has been handed down for generations. As the story unfolds, we too are transported to faraway lands and mystical events as the Old World's Saint Nicholas is transformed into modern day Santa Claus. At first Saint Nicholas, the patron saint of children, travels the world alone, performing small miracles and keeping track of his young followers in the sacred book of life. On his way Saint Nicholas is arrested, accused of being a spy, and is sent to a Spanish prison where he may have to spend the rest of his days, until and energetic young man, Pete, comes to his rescue.