Traci and Steve bring Colleen home after being expelled from school. Colleen is surprised to see her grandfather waiting at the apartment. Traci makes Colleen tell John the reason she was expelled and that she has been smoking marijuana for awhile. John talks to Traci privately and asks to take Colleen back to Genoa City immediately. Traci agrees and John and Colleen take the next plane back to Genoa City.
Raul returns from shopping with Brittany for a Christmas presents for his mother. Raul was not able to find anything because everything was so expensive. Mac is at the coffeehouse and is surprised to know that Raul and Brittany are hanging out together. While Brittany is away from the table, Mac tells Raul that Rianna is getting closer to J.T. Raul tells Mac that what Rianna and J.T. do, does not interest him. After Mac leaves, Brittany tells Raul that she shoplifted the sweater that he liked in the store for his mother. Raul is appalled by her actions but Brittany leaves it for him anyway.
Rianna is in J.T.'s bedroom and she is ready to make love with him again. He tries to turn her away after thinking about Mac saying that she trusts him and he wouldn't hurt Rianna again. Rianna refuses to take no for an answer. She begins to remove his clothes and kiss him passionately.
Phyllis called Michael over to discuss her conversation with Nikki. Michael tells her not to worry about Jack's family and friends. After Michael leaves, she calls Jack at the office and finds out that he is with Nikki. She calls him on his cell phone and asks him to come home immediately.
Neil tells Malcolm that he and Alex have feelings for each other. Malcolm doesn't believe it. Neil says he should have listened to Ryan when he told him to follow his heart. Neil tells Malcolm that he would have won if they had fought over Alex. Neil tells Malcolm that he doesn't truly know because he was the one solving all the problems in Malcolm's relationship. Malcolm storms out and goes over to Alex's office.
Jack and Nikki break into the lab to get the info on Diane's baby. Nikki told Jack about her confrontation with Phyllis. Then Phyllis calls and asks him to come home immediately. After Jack leaves, Nikki put the codes into the computer and finds out that the real father of Diane's baby is Jack Abbott.
Neil pops some aspirin when Victor walks in, demanding to know who was responsible for a screw-up resulting in the loss of a bid on a company. Neil admits he is the one responsible. He had a bad night and it slipped his mind. Vic understands but he needs to rely on Neil. He tells Neil to take some time off with his family. Later Neil gets a call from Alex. She's on her way there now.
Malcolm & Alex's:
Malcolm returns home in a huff wanting to speak with Alex over what Neil said to him. He tells her what Neil said and she doesn't deny it. He can't believe how blind he's been with Neil telling him all the right things to get to Alex's heart. He thinks that Neil is lying though about Alex's feelings for him.
Mac invites Raul to the Boutique to finish his shopping. He leaves the sweater Brittany shoplifted with Sharon, promising to pick it up if she didn't show up. Later Cassie and Nick show up from shopping. Cassie got Noah a nice Christmas gift which she hopes will cheer him up. A young man enters the coffee shop looking for Raul. Sharon tells him that Raul should be back soon. He then approaches Cassie and Nick and asks her about her present for Noah. He charms her with tales of working on a ranch in California. He tells her that it's the perfect gift for Noah. Later he chats with Sharon and Nick and is about to explain who he is when Raul sees him and happily hugs his brother Diego.
Raul and Mac show up to meet Billy. Raul doesn't feel like getting into some big discussion. They're worried about him since he hasn't been himself. He tells them it's more than his break up with Rianna that's changed his mood. Almost dying twice in the past year has changed things. He feels pressure from all around him and doesn't even know what he wants out of life. They want to help but he doesn't think they can. He's sick of preparing his whole life for tomorrow rather than living for the now. What if there isn't a tomorrow, then what was the point? He thanks them for trying but this is something he needs to work out.
Paul and Lauren go over their holiday plans. He invites her to both Midnight Mass and Chrsitmas day with Mary but Lauren wisely thinks there's only so much Lauren Mary can handle. They agree to meet up that night. Paul wonders why all the women in his life are at war with Mary. Lauren points out that it wasn't true with Isabella. He hasn't spoken with her in weeks. Lauren heads to ladies room as Paul exits. He bumps into Isabella.
Michael meets with Isabella who tells him she found a place to live and reminds him that he is to pay as part of their deal. She wonders why Christine left in such a hurry. Michael sees through her, she's only interested to know if Chris and Paul met. They did but nothing major changed. He wonders why Isabella's staying in town if she sees no future with Paul. He wonders why she couldn't be pregnant by Paul. She and Paul were only together once and he was a lot more careful than Mikey.
Jack has an early present for Phyllis who wonders if it's baby-related. He promises that having a baby is not 1st on his mind, that's just a possible added bonus. She's tickled to find the present is some kinky lingerie. He then presents her with a honeymoon trip to a remote inn. She's elated especially since they're starting the second phase of the in-vitro. She also figured he'd want to spend the holidays with his family. He points out that she is family, or will be soon. Later he calls out for her and she soon pops down wearing a robe. She reveals that she's wearing his present. He's worries that someone might walk in so he carries her upstairs.
Katherine comes by and Nikki tells her she has a secret that she must tell. She swears Kay to secrecy: she knows who the father of Diane's baby is. It's Jack Abbott. Neither can believe the odds of it happening. They don't know why Jack's sample was there in the first place. Nikki thinks that Diane's secrecy about Christian could be construed as proof that she's an unfit mother. She's hesitant to tell Jack and meddle even further. Kay suggests that it's the perfect solution for childless Jack. Of course that would require him spending time with Diane. Kay instructs her to find out what kind of life Christian has now. A challenge since Diane loathes her.
At the Studio, Olivia rushes over to talk to Malcolm about Nate. Malcolm tells Olivia how ticked off he is at Neil. Malcolm couldn't understand what went through Neil's head when he mentioned that he was madly in love with Alex, the woman who's supposed to be his fiancée. Malcolm feels he cannot approach Neil at this time until Neil has learned to calm down and get a grip on his life. Malcolm thinks Olivia is partially to blame because "when Neil broke up with you, he had mentioned it was about another woman. And you think that woman is Alex?"
At the Newman Ranch, Nikki gets a strange call. Something is wrong with her sister Casey. Victor asks to have the Newman jet ready and Nikki flies off to be at her sister's side. Nikki had talked about cooking Christmas Dinner this year to give Miguel a break. Nikki felt the whole family should pitch in. Victoria remembers how bad she was in the kitchen until Ryan pitched in to help. This brought back feelings for Ryan. Victor knows "Victoria is putting on a brave face." Nicholas replies, "It's Christmas and we should pull together as a family." Cassie replies, "Even though it doesn't feel Christmassy, we can make it be Christmassy." Sharon adds, "It's the spirit that counts"
Paul runs into Isabella. Isabella tells Paul the reason she's back in Genoa City "has something to do with a possible job offer" Paul asks why is Isabella "pushing you away from me" Isabella thinks its for the best and feels "our association ended the last time we talked" Isabella flat out asked Paul "what do you want" At Gina's Isabella and Lauren sit down to discuss about Isabella's pregnancy and what she is going to do with the baby. Isabella politely tells Lauren to butt out of her life. "Even if I do stay in Genoa City, it's none of your business" Lauren boldly asks Isabella if she still has feelings for Paul. Isabella knows Lauren still wants Paul and tells her "why don't you help Paul forget about me and his precious Christine. You have my blessing." Paul told Lauren, "She made it clear I wasn't the reason why she returned to Genoa City" Lauren makes moves on Paul and feels they could make a good connection if they got back together. Paul felt uneasy at first and asked Lauren, "You sure you want me back in your life?" Lauren replied, "Maybe it's a risk I am willing to take."
At Crimson Lights, Raul introduces Diego to Nick, Sharon, Cassie, and Mackenzie. Raul is happy to have his brother back for a visit and Mackenzie can see it's good to see a smile on Billy's face again. Billy is happy to be spending the Holidays with Mackenzie.
Brad and Ashley were admiring the Christmas tree with their little girl when the conversation wandered to the way that John was treating Brad in regards to the situation with Colleen. Brad expressed his anger to his wife about being told to "practice being a Daddy some other time" by her father. She tried to be understanding toward both sides.
Jack brought in a surprise for Phyllis and made her turn around while he had the guys bring a large, live Christmas tree into the living room and set it up. She loved it and they shared the tradition of hanging a favorite ornament that no one else in the family could claim. They were just wondering whether John would be back in time for their wedding and whether or not Steve and Traci could be there when Colleen walked in the door with her grandfather close behind. They had arrived late the night before. John told Jack and Phyllis why they were there, which upset Colleen somewhat. Jack and Phyllis promised not to nag her about it, then Jack and John left the girls alone. Phyllis made the observation that she "really screwed up big time, huh?" which put Colleen on the defensive. Phyllis switched the topic to decorating the tree and choosing an ornament to hang. Colleen insisted that she was not considered part of the family, but hung an ornament anyway.
Billy paid Mac a visit early in the morning that day. He brought two gifts for her and wanted her opinion about the one that he bought for Colleen. First he upset her by asking whether or not her mother was on her gift list for the holiday. She reacted badly and he dropped it. He brought out a music box for Colleen and she immediately began reliving her happy past with her mother -- a time when she sang her to sleep every night when she tucked her into bed. She told Billy about it and he was encouraged. He wanted her to open one of his gifts for her and leave the other under the tree. She opened a framed picture of the two of them at the prom -- a special reminder of how it all began.
Amanda found Larry Warton in the office at the homeless shelter waiting to volunteer to help out. He was happy to see that she hadn't left town and asked her again about why her staying depended upon what someone else decided. He let it slip that he was an ex-con and on probation then started to leave -- she stopped him saying that she could cast no stones at anyone given her past. She admitted to him that her daughter was in Genoa City and she was trying to make things right with her. The Christmas present of her dreams would be finding her way back to a relationship with her daughter. Tears came to her eyes and Larry offered her his handkerchief. Their hands held together for a moment -- a very special moment. . .
Diego complained to Nick and Sharon about how parents treat you like a kid no matter how long you've been gone. They couldn't relate that well because, they explained, they lived right next door to Nick's mother and he worked for his father. After Diego left, Nick told Sharon that he had a little more shopping to do and asked her about what she may be wanting. She didn't cooperate very well, which wasn't surprising given their strained relationship of late. He ended up at his father's office telling Victor about his problems and plans to solve them. Victor told him not to give up and to work as hard as he could to make things right.
Back at the coffeehouse, Diego was there when Sharon brought in the mail for the day. He made small talk about it as she found a special envelope -- its return address was the DNA Diagnostics Center. As he talked, she remembered her words about wanting to know the paternity of their lost baby. . . .
Malcolm and Nate ran into Neil at Gina's that morning. Nate went on and on about how fun Christmas would be with them altogether celebrating and ice skating. Neil was hesitant about whether or not Malcolm had really agreed to that and, after Neil left, Malcolm told Nate that Neil could not be there despite his son's urging.
Neil talked to Victoria at the office and she tried to find out more about what caused the lost deal earlier that week and her father's mistrust that the problem was solved. He overreacted and yelled at her, then she finally left him alone. Soon he was pouring another drink straight up and down the hatch. . . .
Nick and Vic talk about the strain between Nick and Sharon. The paternity is still an issue but Vic doesn't see why. The baby is gone, it's time to move on. He's disappointed Nikki won't be around especially since Sharon was starting to perk up with the idea of a big family get together. Vic promises a surprise for them all to make it all right. Nick now regrets asking Sharon to get the test done. Later Vic gets the A-OK on his plan. Vic promises Nick an adventure.
Mac thanks Billy for his early present to her (the prom photo) and they are 'caught' kissing by Kay. She reminds Billy to get ready for Jack's wedding. They talk about Colleen and John's trip idea. Later Kay and Mac talk about how far Billy has come since he came back to GC, mostly thanks to Mac's influence. Mac mentions how the music box Billy bought for Colleen reminds her of the one Amanda got her when she was little. Kay asks her if she could invite Amanda for Christmas dinner.
Rianna and J.T. talk about Christmas. She has a present for him but he wants to open it later. Brittany interrupts just as Rianna has to leave. J.T. isn't sure about spending time at Rianna's house on Christmas day. Britt wonders if J.T. has thought this through. If Mac finds out J.T. only used Rianna for sex she'll hate him. She then wonders if he and Rianna have already slept together recently. Britt sees nothing but disaster in his future.
Sharon opens the letter from her doctor regarding the paternity of her baby. She tells Diego that it's a bill for a test she had run but not the results she was expecting. He suggests calling the doc to get the results. Later Raul shows up looking for his brother. Diego notices the icy look Rianna gave him and asks about it. He explains that he was his ex. He mentions that he is seeing a new girl but keeps mum on the details. Raul wants details on Diego's life including info on this girl Carol Diego wrote about. They were together for four years but broke up when she was frustrated with his directionless life. Raul asks him to stick around longer. He doesn't think it's a good idea. Diego bumps into Sharon and asks if she got her test problem straightened out. She opens the envelope and discovers who the father was. Diego sees her tear up and gives her a hug.
Larry and Amanda chat about him volunteering at the shelter. They toast to 'survival'. Ned didn't know they were acquainted and Larry fills him that Amanda is the reason he's volunteering. Ned needs him Christmas day which Larry signs up for. Amanda's impressed. She hopes that Mac will stop by Christmas day. Larry is intrigued by her strange relationship with her daughter but doesn't pry. They talk about the positive stuff he got from his days in prison. He looks forward to seeing Amanda again.
Phyllis and Jack are getting ready for their wedding. He brings her tea and toast to calm her nerves. They fool around a little but Phyllis puts the breaks on, since they are getting married very shortly. Jack gets a call from Nikki, explaining why she can't be there. Phyllis isn't the least bit disappointed and wonders about Nikki's involvement in the sperm switch. They were in the middle of looking for the info on the mystery donor. Nikki never mentioned what she found but he doubts she found anything as she would have gone to him right away.
Billy, Ashley, Brad and Abby arrive. Brad asks about Colleen and Jack tells him that she's in GC now. Brad and the others reel from the news of what Colleen did in NY. Brad thinks John was right to bring her to GC. Colleen overhears them talking and is sick of being lectured. Later she runs into Billy and is surprised he isn't giving her a lecture too. He tells her that he once messed up big too but with booze. He hopes she sees this as a wake-up call.
Sharon demands to know from her doctor why she didn't get the results of the paternity that she's been billed for. The doc admits to getting the results but hasn't opened them yet. She was hoping Sharon would forget about the whole thing. Sharon isn't angry at her husband anymore but there's still a gap between them. She thinks it's because they don't know. The doctor hesitantly hands them over to her.
Michael gets a call from Diane in Milan, asking him for a favor. She wants Michael to send J&P a wedding gift in his name. He already sent a gift, so she asks him to send it anonymously. He wonders why she'd do it, and she passes it off as sentiment. Going back to GC was a mistake but she still can't stop thinking about Jack. He tells her to forget Jack and get back into the dating world. She agrees but asks him to send the gift anyway, as a good-bye.