

Kelso gives the toys from the Toy Drive to the gang, leaving Kitty with no toys for the kids at the Ladies of Point Place Christmas Party. Jackie is upset that Hyde won't go to the party with her, making her think that he's not as mature as she thought he was. The guys have to come up with a way to get the toys to the party without the kids seeing them being brought in, and Red distracts everyone with an unusual Christmas story.
A week after Eric and Donna's engagement was called off, they are both on good terms, but have to make big decisions regarding their futures. Donna gets a new look, and Eric decides to take a year off, but to do that he needs to sell Donna's engagement ring to get some money. There's only one problem with his plan: Donna threw it off the water tower. Also, Bob is torn between Pam and Midge, and Red puts pressure on him (only because Kitty pressured Red) to choose between them. However, one of them takes the decision out of Bob's hands.