The Wilkerson family is at a complete loss of cash when Christmas arrives and so everyone has to make their own homemade presents for each other, without spending any money. When Hal realizes that everyone's gifts are better than what he made, he panics and claims that his gift is far away from home, and takes the family on a long drive to absolutely nowhere.
Hal and Lois are strapped for cash as Christmas approaches, and things are made even worse when the now unemployed Francis and Piama (due to some shenanigan where all of Otto's checks ended up in a fake ATM and a threat to sue Francis) decide to come home for the holiday, and Lois got into a car-crashing war with a woman (because she hit her car door on Lois' car and wouldn't apologize). As a result, they decide that the Christmas gifts will have to be homemade this year. When the family makes much better gifts than Hal, he promises them that he's going to take them somewhere wonderful and drives around aimlessly looking for somewhere that's as amazing as he claims, open on Christmas Day and is free. However, just as things are looking their bleakest, the family discover where Malcolm really got his 'home-made' gifts from. Meanwhile, Malcolm feels excluded when his brothers do fun stuff.
- First appearance of Francis and Piama in the season.
- Third Christmas episode. (Christmas, Christmas Trees)
- Although it is not seen, Francis reveals that he got fired from The Grotto because he deposited all of the Grotto's money into what he thought was an ATM, but was actually something that stole his money. (What it really was is never specified) This was the last straw for Otto and Gretchen, and so, after over two years of being too nice and forgiving, they finally fired him and his wife too.
- Francis reveals that there is a popularity list for the Wilkerson boys. From most beloved to least popular, they are himself, Dewey, Reese, Jamie, and Malcolm.
- This is the second time where Lois has almost ruined Christmas for the boys as it was her who cost the family their remaining money to buy the boys real Christmas gifts and she planned on giving the boys simple lanyards as a Christmas present even after they made thoughtful gifts for her and Hal. She also does almost nothing to help Hal fix the problem in getting the boys a good gift and allows him to steal Malcolm's credit card to pay for their skiing trip at the end.