A boy tells a bell-ringing Santa Claus that he wants a coonskin cap for Christmas. The Santa packs up for the night and is approached by a man who tells him to not disappoint the boy. When Santa gets short with the man, he is shot. The shooter, dressed in the bloody Santa costume, enters a residence and kills a girl's parents when they cause him to lose his "Christmas spirit".
The killer is known as Leigh Emerson and becomes a patient at Briarcliff. Sister Jude keeps him shackled, even for a group picture with the others, as she feels he is a danger both inside and outside the asylum. He proves her correct as he bites an orderly's nose and upper lip. Jude locks him in solitary confinement and canes him over the course of his stay.
Sister Mary Eunice tries to be festive with the patients in the common room, but claims Sr. Jude threw away all the tree ornaments. Mary tells the patients to be creative as she improvises and decorates the tree with their belongings. In the laboratory, Frank prays over Grace's dead body and tells Dr. Arden they should report the recent events to the police. Arden asks if he wants them to know Frank killed an unarmed woman but Frank does not care.
In the office, Sr. Jude sneaks in and holds a straight razor to Sr. Mary's throat, threatening to end the demon's possession of her. Her telekinesis breaks Jude's hold and Dr. Arden is asked to call security to escort Sr. Jude out of the building. He mentions Frank's intentions to confess, and she promises to take care of it. She takes a Santa suit to Leigh, intent on lifting his spirits. She recites his criminal history, which began when he was arrested for shoplifting and sodomized in jail. She gives him the choice of being the victim or the victor.
Arden brings Mary a present of ruby earrings. She giddily takes them, even after he tells her of the jewelry's history. He took them from the feces of a wealthy "Jewess" in a concentration camp who hid them by ingesting them daily and eventually died. He hoped she would be appalled at the story but as she is not he learns how much she has changed. She calls him "pathetic" and warns that even God cannot help him.
Lana worries that Sr. Mary hasn't done anything about her claims regarding Dr. Thredson when she discovers Kit has returned to the asylum. He has been drugged and dreams of pregnant Alma who morphs into pregnant Grace. He apologizes for getting her killed and Lana wakes him from the dream. She explains to him that Dr. Thredson is the killer and that she will prove Kit's innocence. He wants to help her but is too drugged to help at the moment.
Jude talks to Mother Claudia about the country forgetting the true meaning of Christmas. She thinks the Devil is the reason and vows to not let Sr. Mary is the next convert. Their meeting is interrupted by news that Dr. Arden wishes to meet with her. He admits to her that she was correct about Sr. Mary and needs her help. He vows loyalty to her if she can return Sr. Mary's innocence. He later lets Sr. Jude into the asylum through the kitchen entrance, and she tells him she must speak to Sr. Mary alone in the office.
Monsignor Howard delivers a pointy handcrafted star from the Boston archdiocese to put on the asylum's tree. He commends Mary for allowing Leigh to have a chance at redemption by allowing him to be unshackled and dressed as Santa. Leigh then knocks Frank off of a ladder, slices his face with the star and attempts to stab him with it before orderlies tackle him. Arden arrives to tell Sr. Mary she has "pressing business" in the office.
Lana finds a phone but Dr. Thredson stops her while she is dialing. He tells her she has forced him to "kill" Bloody Face and destroy all evidence. He had planned on letting her talk to the police, as it would be the word of a mental patient against the word of a psychiatrist. She has, however, betrayed his trust and forced his intimacy, and he prepares to strangle her with the phone wire. Kit enters with a fire extinguisher to knock Dr. Thredson unconscious. Lana wants to kill the doctor but Kit needs him alive to show who is the real killer. They stow him in a storage closet where Lana promises Dr. Thredson she will one day bury him.
Frank puts Leigh back in his solitary cell. Sr. Mary believes Frank has had trouble with Leigh and slices Frank's throat with the straight razor. She feigns worrying about a rampage as Leigh maniacally laughs. In the office, Sr. Jude prays for guidance and strength. The door opens and Leigh enters. When asked, he says he is there to open his "present." Sr. Mary locks the door from the outside and Arden affirms his loyalty to her. Arden leaves to take Grace's body in a cart down the death chute so his altered creatures can dispose of her. Along the way, he is stunned by a bright light, a deafening sound and fractured images of a strange being. He regains his senses to find an empty cart and a missing Grace. He has yet to reach the exit. In the office, Leigh reminds Sr. Jude of her cruelty to him by caning her across the desk. He intends on raping her, but she stabs him in the neck with a letter opener.
- Sister Mary Eunice to Arthur Arden: "Did you celebrate Christmas in your Nazi household?"
- Sister Mary Eunice to Arthur Arden: "And if you're against me, even God can't help you."
- Sister Jude to Mother Claudia about Satan's plan: "Bit by bit, he turns our eyes away from God."
- Leigh Emerson, dressed as Santa Claus, to a woman on his lap: "What do you say we blow this pop stand, go savage a few elves, and then suck on each other?"
- Leigh to Sister Jude: "There is no God, but there is a Santa Claus!"
- Lana Winters to an unconscious Oliver Thredson: "One day, I'll bury you."
- Now that the extraterrestrials have been witnessed by Dr. Arden - who at the time was neither suspected to be mentally unwell, nor intoxicated - will he expose them to the outside world?
- Will Sister Jude learn from the mistakes she made with Leigh, or just continue to be sadistically cruel to her patients in the future?
- In a December 2012 interview with Entertainment Weekly, series co-creator Ryan Murphy spoke about writing this episode with guest star Ian McShane in mind: "Christmas and American Horror Story do not go together and so we were trying to figure out What's our version of Christmas? And the answer, of course, is a homicidal Santa. There's a whole sub-genre in horror dedicated to these psycho Santas. It's a thing. So we decided let's write somebody who's so crazy they end up in Briarcliff. I had heard Ian McShane really loved American Horror Story. So we wrote it and we were like, 'Let's send it to him and ask for a quick pass.' To my delight, he said yes."
- ↑ Stack, Tim (December 06, 2012). 'American Horror Story': Ryan Murphy on 'Unholy Night' -- EXCLUSIVE. Entertainment Weekly.