At Emma's, Jack runs into Carly as she is working on a costume for Sage. She asks him if they could all spend Christmas together and Sage dashes in the room, begging him to say yes. Jack tells her that he and Carly were having a private conversation and Carly gets her to go upstairs to try on the costume. As Sage leaves the room she tells Jack that if they can all spend Christmas together she doesn't need any presents. Jack is annoyed with Carly and doesn't want to give Sage false hopes. He tells her he won't spend Christmas with her- that it would be bad for everyone. Carly tells him she understands it wouldn't be a romantic Christmas and that she can't stand the thought of it being ruined for Sage. Jack tells her that she can have the kids but on Christmas Eve day only, as long as Kit and Sam aren't there. Carly makes the best of it and agrees. Sage comes downstairs to show off her costume and Carly tells her the Christmas plans.
Katie and Brad lounge on her bed watching cartoons and she starts to cry over the storyline and doesn't understand why. Brad suggests that perhaps she is pregnant, but she storms off into the bathroom. She comes out looking crestfallen with a pregnancy test in hand and tells him she isn't pregnant. She says they are a failure, but he tells her that they just started and reassures her everything will be fine. She worries that something is really wrong with her and that everyone thinks this is a bad idea anyway. Brad tells her this is about her dreams, not what other people think- especially Jack and Carly. Katie frustrated, tells Brad that it's over and tells him to leave. They argue and Brad storms out.
In Old Town, Brad runs into Carly and angrily tells her that he and Katie won't be having a baby.
Alone in her room Katie gets a knock on her door and thinks it is Brad. It turns out to be Margo and Katie angrily tells her that things didn't work out with Brad and admits it was a bad idea. She vows to get over Jack, but Margo tells her she doesn't want to because she still wants to be with him. Katie admits she does want him back, but can't because of Carly. Margo tells her it isn't Carly that stands between what she wants and leaves.
At Al's Brad tells Vienna the news about he and Katie. She gushes about her own feelings of wanting to have a baby- and that Katie just needs a little help. She tells Brad that he must buy Katie jewelry for Christmas to woo her - he agrees and gives her his credit card.
At Oakdale P.D. Carly tells Jack that Katie dumped Brad and that Katie still loves him and urges him to go to her and tell her how he feels. Jack doesn't buy it and accuses her of having ulterior motives and that he doesn't trust her. Carly tells him that she loves him too much to see him in such pain and if Katie is the one that can take away that pain, so be it.
Margo arrives back to the station and comments on Jack's foul mood. He tells her about his visit from Carly and how she supposedly wants him and Katie back together. Margo tells him that she just came from Katie's and she does indeed want him back. She tells him that the only person standing between what he wants is himself. He exclaims that Carly was right- and rushes out to see Katie.
Alone again, Katie sadly paces her room and finds the hockey jersey that Jack gave her on their wedding night. There is another knock at the door; this time it's Jack with a Christmas tree for her. He tells her he is there to make sure she has a Merry Christmas.
Arriving back home, an upset Carly slumps on the couch and is startled by Sam. He tells her he fixed a leaky pipe under the sink. She thanks him and tells him it's nice to have a man around the house again and bursts into tears. Sam tries to cheer her up with his dummy, but she tells him she isn't in the mood for this and runs out of the room.
At the hospital Ali and Aaron wait for news on Sofie. Aaron is worried about her and this bothers Ali, but he reassures her that Sofie is just a friend. They are alarmed when they hear her screams and Will comes out of the room to tell them that Sofie needs a cesarean section, but won't consent to one. Aaron wants to go talk to her, but Will tells him that Gwen is helping her.
Back in the room Gwen explains to Sofie that if she doesn't have the cesarean section, her baby could die.
A short time later, Gwen comes out into the hall wearing scrubs and announces to Will, Aaron and Ali that Sofie agreed to the cesarean section and the baby was born! The doctor told them all that Sofie and baby are going to be ok- and thanked Gwen for talking her into the surgery and she may have saved their lives. Gwen is emotional since this baby was supposed to be theirs and Will comforts her. The doctor gives the ok for Sofie to have visitors, but one at a time, so Ali tells Aaron to go see her. He tells her how great she is being about this and goes in. Out in the hall with Will, Ali wonders what Sofie is going to do. Will tells her that they all must be there for her. Ali comments on Aaron being there for her too. Will tells her that he thought things were going better for she and Aaron- Ali says she thought so too. She tells Will that she picked up an extra shift there at the hospital and leaves.
Sofie apologizes to Aaron for the way she treated him and he tells her to forget about it. He tells her she did an amazing job today, but she wonders what she is going to do now that the baby is born.
A beaming Gwen comes back from visiting the baby in the NICU nursery and tells Will what an angel she is.
After visiting with Sofie, Aaron asks Will where Ali is. He tells her she went to work and she said for him to take care of Sofie.
Gwen tells Sofie that she saw her baby and she is healthy and strong. Gwen tells her she is beautiful; just like her mom and that the nurses said she can hold her now, but Sofie doesn't want to since she isn't sure she will keep her. Gwen tells her that she never held her baby when he was born- and never got to. She told Sofie that she will regret it for the rest of her life if she doesn't. The nurse brings Sofie's baby to her and she holds her. Aaron is there and they admire her together.
Dusty criticizes Emily for writing a puff piece about Chris and accuses Chris of having caused Bob's stroke. Emily fishes to find out what Dusty knows, but he keeps pushing to find out what Emily knows. Emily gets word that the paper has been put to bed with her article in it. Chris reviews Bob's chart and has Dr. Sherwood paged to tell him no additional tests are necessary. Chris intimidates Dr. Sherwood and tells Kim he'll personally supervise Bob's care. Dusty tells Lucinda about Chris's fight with Bob. Kim accuses Dusty of trying to make trouble for Chris. Dusty tells Emily he'll find out what Chris is hiding. Emily tells Chris to stay away from Dusty. Vienna gives Brad the jewelry she bought for him to give to Katie. Jack tries to get Katie to accept his Christmas tree. Brad overhears Jack and Katie laughing and leaves. Jack and Katie get close enough to kiss, but she pulls away. Brad calls Mia, the model, and asks her out. He gives her the gift Vienna bought for Katie, unaware it is a jeweled baby bootie. Jack tells Katie he thinks Carly has given up on them getting back together. Katie refuses to let herself get hurt again, as Brad calls the broker and tells him he no longer wants to buy the house. Katie asks Brad not to leave her alone and he cheers her up. She decides to keep trying to get pregnant. Brad lies and assures Katie he doesn't have feelings for her. Carly tries to get through to Parker, but he says things would've been better if she'd never come back. Jack tells Parker that Carly tried to help him get back together with Katie and states that he plans on getting Katie back. Parker asks how Jack plans on keeping Uncle Brad away from Katie, but Jack doesn't think Uncle Brad will be a problem. He tells Parker he plans on getting back together with Katie by New Year's.
Back at home, Gwen looks out the window and thinks about Sophie's baby. Will comes in and asks her how she is doing and she admits she is thinking about Sofie's baby, but is happy she was there to see her niece born even if they can't adopt her. Gwen gets up and tells Will she is going to head back to the hospital and Will advices her to not get too attached to the baby. Gwen tries to convince Will that she just wants to help Sofie and have a relationship with her niece. Will offers his support and agrees to meet Gwen at the hospital.
At Memorial, Sofie gets a wake up visit from Iris who has something from Cole. At first, Sofie is happy thinking that Cole is returning to her and the baby, but Iris gives her legal papers from Cole terminating his rights as the father. Sofie is angered by Cole's not coming and seeing her after she had the baby. She vents her frustration at Iris and as Iris defends Cole, Gwen arrives and tells her mom to get out. Iris fires back and tells Gwen to mind her own business and that she is there to give Sofie papers from Cole. Gwen looks at the documents and realizes what Cole has done. Gwen tells her that if Iris keeps bugging Sofie, she will call the police and let them know that Iris tried to sell her own grandchild. Iris leaves, but only after a few biting remarks to Sofie. Once Iris is gone, Gwen apologizes and the two discuss the baby and Sofie's future. Sofie explains that she dreams of a wonderful life with her daughter, but she has no family and no way to give her daughter the life she deserves. Gwen tries to reassure Sofie that her love will make everything alright, but when the nurse brings the baby in for feeding time Sofie immediately tells her she isn't ready to feed her baby and asks her to get out.
Aaron runs into Alison at the diner and when Alison gets up to leave Aaron accuses her of running away from him. She denies his accusations and he invites her on another date. When she declines his invitation, Aaron questions whether she is angry about him spending so much time with Sofie at the hospital. Aaron pleads his case to Alison and explains he couldn't just abandon Sofie, but he really wants to have a relationship with her. He also reminds Alison that they shared a great night together before going to help Sofie and Alison agrees "the sex was good." Aaron is taken back at Alison's response and asks her if that night was just about sex for her. Aaron asks Alison to give them another try, but Alison wants to know what he thinks will be different if they start seeing each other again. Aaron remarks that they have both changed and Alison agrees to give it another shot. Moments later, Aaron's phone rings and when he tries to put the call off, Alison guesses it is Sofie and encourages him to answer it. Sofie asks Aaron to come and help her and Alison persuades him to go, but declines his invitation to pick her up later and it is clear Alison is not keen on starting things up again with Sofie in the middle.
Aaron arrives at the hospital to see Sofie and Gwen asks him to cheer her up. As soon as Aaron enters the room, Sofie begs him to get her out of the hospital. Aaron tries to persuade her to stay, but Sophie explains that if she stays in the hospital, seeing all the babies passing her window, she will go insane. Aaron asks her to go to the farm with him, but she tells him she only wants to return to the hotel. When Gwen and Will return later to Sofie's room, they find her missing and learn from a nurse that she left with a young man and the baby is still in the NICU. At the Wagon Wheel, Aaron gets Sofie comfortable and tells her not to worry, that she comes first. Gwen and Will arrive and try to find out what Sofie is thinking and if she is okay. They learn she is fine and turn to go, but Gwen tells Will she has an idea and the two go to make a few phone calls. When they return they tell Sofie that Lisa has agreed to let her stay at the Lakeview and let her return to her old job. Sofie questions why Will and Gwen are helping since they aren't getting her baby. The two explain that they want to help her and their niece and they expect nothing in return. They leave Sofie to rest, but encourage her to think over Lisa's offer. Once in the hall, Gwen admits that she does want to help Sofie, but she wishes the newborn was their baby.
Rosanna gets ready to call Craig, but is interrupted by Paul questioning why she snuck out of bed again. Rosanna makes up excuses and Paul asks her if she is avoiding him because he paid too much attention to Meg. Rosanna recalls Craig condemning her for changing the DNA results and then turns her attention back to Paul who claims that he realizes now that Meg's baby is Craig's and that Meg is no longer his problem. He apologizes for focusing too much attention on Meg and Rosanna explains she was a little hurt by his recent interest in Meg. Paul asks Rosanna to spend the day with him, but she declines saying she has a headache and needs to rest. She sends Paul out to buy ornaments while she phones Craig to discuss the DNA results.
Craig looks on a sleeping Meg and goes to his laptop to research drugs that cause miscarriages. Meg wakes up and asks what he is doing as Craig hides the computer from her site. He claims to be looking for gifts for her, but she tells him that she saw it was a medical website and wants to know what he is up to. Meg explains that she knew he was up all night and wants him to admit that he is just worried about the baby and trying to look into their baby's condition. Meg, who still thinks that the baby is Craig's child, tries to reassure him that everything will be alright. Meg wants to call the doctor to have more genetic tests done, but Craig tells her he doesn't want her to do anymore tests. Craig gets a call from Rosanna and heads out. Meg feels bad for Craig thinking he is worried about his son.
Meg heads out to the farm to see her family and when Emma questions her visit she explains that she is worried about Craig's reaction to the baby possibly having a genetic disorder. Emma tries to explain that Craig is sensitive because he has lost a son in the past and if she believes the baby will be alright then he will begin to believe it as well. Meg asks her mother if she approves of Craig and Emma admits that she is hopeful Craig can change. Meg confesses that by getting over Paul she believes she and Craig can be happy together. Emma invites the two to dinner and Meg believes her mother has begun to accept Craig.
In the meantime, Craig and Paul run into each other in Old Town and Paul wonders how Craig was lucky enough to get a second chance at life with someone like Meg. Craig tells Paul to stay away from his wife and Paul agrees that Meg is his responsibility from now on. After leaving Paul, Craig has a meeting with a local drug dealer and gets the Xyphorex, a drug that he learns causes miscarriages. Back in his room, Craig gets a call from Rosanna, who wants to know if he is going to tell Paul what she did. Craig says he won't and she questions if Craig will be able to raise Paul's baby and love it once it is born. Craig wishes Rosanna a Merry Christmas and hangs up without answering. Meg arrives, as Craig looks at the vile of Xyphorex, and tells him that her mother has invited them to the farm. Craig tells her they can't go and explains he just wants a quiet night at home. When Meg pushes for the dinner, Craig calls Emma and explains that he had already order a dinner for two. Emma accepts the apology and encourages Meg to take care of herself, as Craig secretly pours the poison into Meg's ginger ale. Meg makes a toast to her husband and their baby and begins to take a sip as Craig throws the glass away from her lips, cutting himself in the process. Meg asks why he did it and Craig claims there was a bug in the glass. Meg asks Craig to let her take care of him and an emotional Craig embraces his wife. Meg bandages Craig up and goes to change as Craig holds the bottle of Xyphorex and cries seeing the sonogram of Meg and Paul's baby. When Meg returns she remarks the baby looks like his father and Craig replies, "We will just have to overlook that." He grabs Meg and hugs her and tells her he loves her more than he thought was possible.
Paul returns home and tells Rosanna that he doesn't believe Craig will bother them anymore. Rosanna is encouraged by Paul's news and believes they can be happy. The two decorate the tree and share some loving moments together in front of their Christmas tree.
Noah arrives at the Snyder farm to celebrate Christmas. Faith and Natalie dash in and interrupt a kiss between Luke and Noah. Holden comes in and Luke persuades his dad to invite Lily for Christmas Eve dinner, and she subsequently arrives with Baby Ethan.
Dallas finds Bonnie in the diner and hands her a package. It is Bonnie's present to adopted daughter Sarah, returned unopened. Bonnie explains that Sarah blames her for the divorce from Isaac. Bonnie drops her day-planner, and out fall two tickets courtside to a basketball game. Dallas mistakenly thinks they are for him until he realizes that Bonnie is giving them to Holden. He warns her that Holden is still married.
Vienna overhears Henry being secretive on the phone and then discovers he has left the diner on some mission of mystery.
Aaron brings pain meds to Sofie who is resting in the Wagon Wheel Motel. The hospital calls and needs her to return immediately, so Aaron takes her. There they meet with a social worker who is concerned for Sofie's health and the welfare of her newborn daughter. Sofie finds herself doing some soul-searching about the baby.
Gwen and Will visit the baby at the hospital and pay a visit to Dr. Bob. A nurse hands Will a copy of The Night Before Christmas and asks him to read it to the patients in the pediatric unit. The book contains a handwritten plea for him to do so from Kim since Dr. Bob is not able to this year. Will reads the story to the children unaware that he is being watched by Aaron and Sofie.
Luke surprises his family on Christmas Eve by standing and walking by himself. He explains how he has practiced with Noah and credits Noah with his will to get better. Lily leaves and Noah and Luke walk her out. Noah then gives Luke a card explaining how he feels about him and they kiss under the mistletoe.
Henry returns to the diner carrying Vienna's Christmas present. It is a brown and white Spaniel puppy, but it is obvious that Vienna would prefer a baby!
Bonnie shows up at the farm and notices how happy Holden is. She wonders whether it is because Luke is walking again or because Lily was with the family. Holden assures her that Lily is still with Dusty and he wants the divorce to continue. Bonnie gives him the basketball tickets and Lily appears with Natalie and Faith. Bonnie returns to the diner after she realizes she left her day-planner there and discovers that the new puppy has destroyed it. Vienna rescues the puppy and bonds with it.
Sofie surprises Will and Gwen as asks them a hypothetical question: If she were to let them raise her daughter, would they let her be a part of the child's life? They do not hesitate to agree.
Lucinda has taken Faith and Natalie to a performance of "The Nutcracker." On their way back through Old Town, they see a dollhouse in a store window, complete with many Victorian-clothed dolls. Faith likes the setting with the whole family gathered in the living room, and she says she wishes it would come alive, like in "The Nutcracker." Lucinda tells her that with magic, it could, and the scene dissolves to show the dolls alive, with Lily sitting next to Dustin Donovan on a sofa. Mr. Donovan has just proposed to her, very woodenly, and she has not given her answer yet. Faith, Natalie, and Ethan are all putting presents under the tree and turn down "Dustin's" offer of help; Lily excuses their reaction, saying it wasn't long ago that they lost their dear father. Dusty leaves, and Holden, the stable boy, enters, calling Lily "ma'am" and saying she can't marry Mr. Donovan because he's not worthy of her. When Lily says no one else will love her, Holden leans in to kiss her but stops when Bonnie walks in, as "Mrs. Jenkins." Mrs. Jenkins is attracted to Holden, although Lily reminds her she's a married woman. When Mrs. Jenkins asks why Lily doesn't accept Dustin's proposal, Lily says because she doesn't love him. Meanwhile, in the kitchen, the servants are gathered: Lucinda is the cook, while Margo is a maid, Tom is a footman, and Bob is the butler. They are preparing food for the gathering, for Master Luke, and Bob is haranguing them about it, especially Tom, his son, whom he calls a constant disappointment because he's "still a footman at your age!" In the living room, Bob approaches Kim, a lady of the house, and flirts with her, arranging to meet her later in the "blue room." Noah arrives and greets Luke warmly. As they embrace, Luke notices Mr. Donovan watching and breaks away, introducing Noah as a friend from the university. Mr. Donovan leaves, and Luke tells Noah apparently he's to be engaged to his mother. He's not happy about it, having made inquiries about him at the club; Noah cautions him to be careful, telling him "we all have our secrets" and calling him "Luciano." Luke says, "Not here" when Noah leans in close to him. Noah tells Luke that he's to be married to a family friend's daughter, saying he's being pressured by his family. Luke responds that what they've had is just a schoolboy thing that resulted from "youth and loneliness." Meanwhile, elsewhere in the house, Chris and Emily arrive, and Chris introduces Emily to everyone, including Mr. Donovan, as his fiancée. Dustin gets Emily alone long enough to tell her she can't marry Chris, but Emily says she'd given up waiting for Dustin to fulfill their plan together, which apparently was for Dustin to marry Lily, take enough of her money to repay his gambling debts (including debts to Chris), and then have enough left to start a life with Emily. Dusty assures her his plan will work, and they kiss; Emily leaves, but Holden has overheard their scheme and tells Donovan that he must leave. Lily walks up, and Dustin tells her to choose to believe a mere stable boy or himself, and Lily faints. When she comes around again, Holden hands her something to drink and tells her that "Robert" has tossed Mr. Donovan out of the house. Lily tells Holden he's forgotten his place, but as he turns to leave, she pats the sofa beside her and has him come sit down, telling him she wants him by her this Christmas; he says they'll be together every Christmas, and the dollhouse scene ends. Faith, Lucinda, and Natalie come back by the dollhouse looking for a mitten they dropped, and Faith notices that the lady doll on the sofa is now sitting by a different male doll than before.
Rosanna passes by the dollhouse and stops to appreciate its charm, noticing in particular a woman looking out of an upstairs window. The dollhouse comes alive again, with Rosanna as that woman, a sickly thing who is married to Paul Ryan and being tended to by Nurse Margaret (Meg). When Paul enters the room, Rosanna tells Nurse Margaret that she can go now, and then she tells Paul that she's well enough that he should give the nurse her notice that she's not needed anymore. Downstairs, Lucinda is serving dinner to Dr. Craig Montgomery, because the lady of the house has told her to; when he asks why she dislikes him, she says because she's seen how he looks at the nurse. Nurse Margaret comes in and tells Dr. Montgomery that the Ryans will be wanting to retire soon, so he should go check on Mrs. Ryan again first; he tells her that's because she wants him to interrupt them before they get too "close." He goes upstairs, and Paul leaves to give him a chance to examine Rosanna; Rosanna tells Craig her mind is troubled, and he says he knows the cause of the trouble and names Nurse Margaret, saying he's seen the way she watches her with her husband. He tells Rosanna he'll help her with this problem, using "the utmost discretion," and she thanks him and tells him she'll reward him for doing so. Downstairs, Paul finds Nurse Margaret and they embrace, and then he gives her a locket inscribed, "Forever love, Paul." He tells her if only his wife weren't ill, he could be with her, but Nurse Margaret says he's too honorable to ask for a divorce even if his wife was well. Craig overhears this and interrupts them, saying Rosanna is rallying and should be fine by the morning. Paul leaves, and Craig snatches the locket from Margaret, telling her he knows what's going on and will go tell "poor Mrs. Ryan." Margaret protests and says she'll leave immediately if he'll stay quiet; he agrees but only if she'll give herself to him. Margo, the maid, brings a drink upstairs for Rosanna and hands Paul a note, telling him it's from Nurse Margaret. Paul reads the note, which says that Margaret must leave tonight but will always love Paul. Paul rushes downstairs but is too late, as Dr. Montgomery has already prodded Margaret out the door and into a carriage, in which they are driving away. Rosanna watches from the upstairs window, and the dollhouse scene fades away.
Sage walks by the dollhouse with Parker and JJ and sees a "sad" lady outside the house, looking in. The lady becomes Carly, who is watching the gathering inside the large house. Brad is "the Reverend," a preacher who is discussing his Christmas sermon with Katie, trying to impress her. Nancy Hughes is the lady of the house, and Vienna is a spinster who is visiting. Katie is afraid she's becoming a spinster, too, because she hasn't gotten married yet, but then, she spots two soldiers, Lieutenant Dallas Griffin and Captain Jack Snyder. Jack asks Dallas to introduce him to Katie, which he does, and Jack asks Katie if he can call on her in the new year. Katie says nothing would please her more. Bob, the butler, comes and tells Nancy that a strange lady and 3 children have arrived at the kitchen door asking for food and shelter. Reverend Brad points out that it's Christmas, so Nancy tells Bob to invite the lady in and give her children food. When Carly enters the room to thank Nancy, she and Jack see one another, and Jack wonders who she is. Brad tells them she's "Mrs. Tenney," who has been gone from Oakdale for a while now and is now a divorcee. Lisa, who is at the party, gasps in horror at the news that there's a divorcee in the house! Katie asks Jack to retrieve her shawl from the parlor; he leaves, and meanwhile, Parker and JJ enter the main room and tell their mother that they can't find Sage anywhere. Jack hears a noise in the parlor and finds Sage, who was behind the Christmas tree trying to look at it. He picks her up to show her the angel on top of the tree, as Carly and the boys come into the room. Carly takes Sage from Jack and sends the children back to the kitchen, then apologizes to Jack. He says her children are beautiful, "which is inevitable." They both remark that they feel like they know one another. Henry arrives at the house as Officer Coleman, complete with his police club, and Vienna immediately comes to talk to him. He tells her he's worked up enough courage to finally ask her something, and just as he begins a proposal, Lisa cries out, "My necklace! It's gone!" Henry tells everyone not to leave until they find out who took the necklace. Carly and Jack come into the room, and Lisa accuses Carly, who insists she didn't take it. Jack defends Carly, saying in this country, you are innocent until proven guilty. Vienna finds the necklace on the floor by the Christmas tree, and Lisa apologizes to Carly for falsely accusing her. Carly thanks Jack for standing up for her like that, holding his hand as she does so, which Katie notices. Katie takes her shawl from Jack and coolly tells him it was nice making his acquaintance. Carly's children enter the room again, and she says they should leave, but Jack tells her it's early still and they should stay. The dollhouse scene ends.
Gwen and Will walk by the dollhouse, and she notices that a light just turned on in the nursery. They wonder if that's some kind of sign, and then they realize there's no baby in the bassinet. In the living dollhouse, Will and Gwen stand by the empty bassinet, with Will saying that 6 months ago, he envisioned this Christmas being very different. Gwen says apparently she was meant to perform on stage rather than be a mother, since their child was stillborn. She thinks she hears a baby's cry, and she goes downstairs, where she encounters Alison, who has her mail. Gwen thanks Alison for all her support over the past few months and asks if there's anything interesting in the mail. Alison says there's one item that says it may prove valuable, and Gwen tells her to send it back if it's valuable, not looking to see that it's a necklace. She hears a baby again and goes outside, where a baby girl has been abandoned on the doorstep. Will says they must try to find the parents and will post a reward for information. Days later, they are upstairs in the nursery with the baby when Gwen's mother, Iris, walks in and says the parents have been found. They go downstairs, where Barbara Ryan introduces herself as the proprietress of a home for unwed mothers. She has Sofie in tow and claims she is the baby's mother, and Aaron, who is with Sofie, has recently agreed to do "the right thing" and marry Sofie. They produce a birth certificate as evidence that the baby is theirs and ask for the reward. Susan Stewart walks in, saying someone had called for a baby nurse from the hospital. When she sees Barbara, she tells Will and Gwen that she saw Barbara the night their baby was stillborn, carrying something in a blanket that was moving. She accuses Barbara of stealing the baby, and Sofie jumps up and says she's not the baby's mother, that she'd tried to steal the baby back and return her to her real parents, Will and Gwen. She tells Gwen she sent her a necklace that the baby was wearing the night Barbara brought her back from the hospital. Alison gets the necklace and shows it to Gwen, who recognizes it as something she thought they'd buried with their stillborn daughter. When she asks Barbara why she stole their baby, Barbara says she didn't steal her, she was just caring for her for a while for a small fee; she glances at Iris, and Gwen realizes Iris did this so that Gwen would pursue her career on stage and earn money for the family. Will tells Alison to call the police, and Will and Gwen are happily reunited with their baby girl.
Downstairs, Susan enters the kitchen, where Lucinda hands out glasses of wine to her, Bob, and Tom and Margo, who have just become engaged, much to Bob's delight. Bob offers a toast, "To Christmas. To family. To hard work. To good company. To peace on earth." And the dollhouse scene ends.
Sage brings Faith and Natalie back to see the dollhouse and says, "I wasn't kidding! They move! It's magic!" As the girls look into the crowded scene in the dollhouse, the Carly doll turns and winks at them. The girls all see the wink and react with awe, running off together.