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In the 1994 remake, either Santa did a Virgin Mary routine on Dorey, or he knew exactly when she was ovulating to orchestrate a liaison so she could conceive a child. Neither option is particularly appealing.
Assuming she was pregnant at that time. It's possible he counted Dorey getting married on Christmas as a set-up for Susan's wish for a sibling.
It was heavily implied. That's enough to be horrifying.
In all versions, the thought that they nearly committed the REAL Santa Claus to a mental institution is horrifying.