Sandy manipulates Cassie, Reva, Josh and Jeffrey into catching Jonathan and Tammy about to make love in the barn. Cassie freaks when she assumes her nephew is attacking her daughter. But she is stunned when she gives Tammy a choice - Jonathan or your family - and her daughter announces that Jonathan is the guy she wants. While Cassie weeps, Tammy and Jonathan return to the boathouse. There they celebrate Christmas together, relieved they're no longer keeping any secrets.
Meanwhile, Josh subtly probes Jeffrey about his own secrets, but is warned to back off. Jeffrey makes it clear that he is the man in Cassie's life now. He's getting pretty tired of Josh riding in on his white horse to play hero, every time she has a problem.
Harley and Gus are getting ready to celebrate their first Christmas as a married couple, when she gets a call from Mallet. He wonders if she forgot she promised to help him stake out Marina's undercover efforts? Harley lies to Gus and claims Spaulding business, then rushes off to meet Mallet.
Sitting in a car, sipping coffee and munching on chocolate donuts, Harley tells Mallet that she and Gus have only been pretending to be estranged all these past weeks. Everything is back to normal now and, oh, those sexy dreams she had about him didn't mean a thing. Mallet wants to hear more about the dreams, but Harley is eager to get back to Gus.
Buzz tells Gus that Alan is trying to get released from the mental institution. Gus is worried this means he'll go after Harley again. When he calls, Harley bids Mallet farewell and rushes back to her husband, rationalizing that she's keeping her stakeout a secret from him for his own good. Harley and Gus reunite at Company...where he wants to know how she got a smudge of chocolate on her cheek.
Josh and Sandy look for a runaway Tammy, but Josh tells Sandy not to get his hopes up. None of them will ever trust Sandy again after what he did to Tammy. Crushed, Sandy comes on to Ava - who turns him down flat. She announces that she knows he never loved her and gives Sandy his ring back. Coop takes Ava back to CO2, where she admits that she's lived her entire life up to this point for Sandy - and she isn't so sure what she's supposed to do next. Coop offers support, which doesn't sit so well with Lizzie. Earlier, she was out shopping with Alex when Quinn showed up and invited Lizzie to St. Moritz. Lizzie turned him down - but did accept his offer of a key to his condo again. Alex warned her niece about playing a dangerous game. Lizzie blew her off and insisted she was doing it all for Coop. However, seeing her boyfriend with another girl, she spins Ava a sob story about how Coop is so busy right now, he really doesn't need yet another person leaning on him. Ava gets the message and, when Coop invites her to the Cooper Christmas party the next day, she politely begs off. Tammy and Jonathan take off into the night, only to end up at a cheap motel. Tammy can't help thinking about her mom, and Jonathan urges Tammy to call Cassie, put all the blame on Jonathan and ask to come home. But Tammy refuses, reminding him that they're in this together. Leaving the motel behind, they take off for parts unknown. Meanwhile, after a pep talk from Reva and Josh about letting your kids go to make their own mistakes, Cassie calls her daughter. She assures Tammy that she's welcome at the Lewis Christmas party the next day, and that she can always come home if she needs to.
In the space of one day, Harley manages to make two major mistakes. She rehires Alan-Michael at Spaulding (thanks to a crisis he engineered, then gallantly swooped in to solve). This means that he's in town to stay. So Alan-Michael tracks down Marina. She'd been on her way to return the dress she bought for New Year's Eve, but Alan-Michael reminds that Marina promised the evening to him, as part of an earlier bet. He is especially adamant that she keep her word after he sees Marina in her dress. She accepts and Alan-Michael is so pleased that he ignores an urgent call from Alan, in favor of being with Marina. Second mistake? Harley confides in Alan-Michael about her recent dreams starring Mallet.
The confession - and an unexpected chat with Olivia about tossing out the old to make way for the new - prompts Harley to return a "My First Christmas" ornament Mallet once made for her. Mallet is hurt, especially considering that earlier in the day he teamed up with Gus to make sure Alan isn't released from the institution and capable of hurting Harley again.
At Gus's urging, Mallet goes to Alan and asks if Alan's offer for Mallet to break up Harley and Gus still stands. Before they have a chance to come to terms, though, Gus barges in, having learned that Alan is having Harley's every move tracked, and threatens his father. Meanwhile, an inadvertent love triangle appears to be brewing at Company, when Buzz swallows his own feelings for Olivia to encourage Frank, who seems to be developing a bit of a crush on the lady, himself.
Vanessa and Dinah go Christmas shopping. Vanessa sets her up to run into Mallet. Olivia is sorry when she runs into Vanessa who reams her out for shoving Billy off the wagon.
Dinah and Mallet bond over bah humbugs. He says his perfect woman is beautiful, smart, tough, and funny and eats cookies in bed. She says the perfect man wears pajamas to bed. They share a tender moment that ends in embarrassment. Later, they fantasize about each other.
Jonathan and Tammy find themselves lost. A police officer finds them and delivers a letter to Tammy from Jeffrey. Jeffrey says that Cassie needs her to come to the Christmas party. She confides that she's scared of going to the party but that she has to go home. He says that he'll be there for her no matter what happens.
While they put together a bike for R.J., Jeffrey wonders what Joshua is keeping from him. R.J. looks on and takes a picture of Jeffrey.
Cassie worries over Tammy while Reva tries to get her into the holiday spirit. Reva believes that Jonathan won't make Tammy choose between him and her family. Rusty and Hawk come home to Springfield. Hawk wonders about the tension between Joshua and Reva and warns Jeffrey to be good to Cassie. Joshua and Reva defend Tammy and Jonathan to the rest of the family. Hawk leads Joshua and Reva to the mistletoe. Olivia breaks up their close moment.
R.J. studies the pictures of Jeffrey. He cries to Cassie that there is no Santa Clause and that Tammy isn't coming home and it's all because of Jeffrey. Jeffrey convinces him that Santa is real.
It's Christmas Eve in Springfield. Lizzie, Beth, James, Alex, and Lillian make an appearance at Alan's room. Alan swears he'll be out soon, a fact that terrifies Gus when Lizzie repeats it to him. Gus and Harley spend their first Christmas together as husband and wife with Zach, Jude, Rick and Mel. Meanwhile, Buzz cheers up a down-in-the-dumps Olivia, but steps back when Frank thinks he's made a date with her. Marina celebrates with her family, but can't keep her mind off Alan-Michael. At the same time, Alan-Michael tries to bury himself in work at Spaulding, only to break down and join the Cooper Christmas party, gifting Marina with a beautiful necklace. Over at the Lewises, Tammy and Jonathan arrive at Reva's party and are caught kissing. Hawk and Rusty awkwardly meet their grandson/nephew for the first time. When a secretly drunk Billy drops by, he only fans the flames by asking Tammy how she could have made such a lousy choice of boyfriends. Jonathan takes a swing at Billy, Hawk and Rusty get into it and, finally, Jonathan and Josh end up knocking down the Christmas tree. Jonathan takes off, and Tammy, much to Cassie's dismay, follows him. They end up back at the boathouse, where they realize that Sandy has trashed their little Christmas tree. But as long as they're together, they don't care. Mallet and Dinah are planning on spending their respective Christmas Eves alone. Until Mallet accidentally sprays Dinah with beer, and both discover they've ordered the hotel's last turkey dinner. Dinah grudgingly agrees to share and the two end up having a lovely evening together. They're interrupted when Gus calls in a panic about Alan's plans for being set free. Dinah assumes that Mallet would rather be at the Cooper party with Harley then having dinner with her, and all but throws him out of her room. However, he returns later, sweeps her into a kiss, and the bickering duo makes love for the first time.