It is Christmas Eve, and Elmo is excited because it is the first Christmas for his puppy Tango, who receives a nutcracker toy as a present. That evening, Elmo is whisked into a Nutcracker-esque dream world where Tango can speak, and the two must pursue a mouse who runs off with Tango's nutcracker toy while learning the true spirit of Christmas.
Tropes:
- Christmas Songs: "Best Christmas Ever", sung by Elmo and his friends at their Christmas Eve party.
- Christmas Special: The first animated Sesame Street production to be such.
- Suddenly Speaking: Tango gains the ability to communicate orally in Elmo's dream.
- To the Tune of...: The songs in the special are reworked versions of songs from The Nutcracker. "Best Christmas Ever" uses samples of the overture (with the bridge sharing samples of "Chinese Dance"), "Sugar Plum Fairy Abby" uses the melody of "Dance of the Sugar Plum Fairy", and "Cookie's Tasty Skating Class" has the tune of "Waltz of the Flowers".
- Triumphant Reprise: "Best Christmas Ever" returns in the end, sung at the conclusion of Elmo's dream as he and the others celebrate Christmas with the mouse.
- You Can Talk?: Elmo's reaction to Tango talking at the start of his dream.
