After being gunned down by police at the end of the previous film, the infamous Santa Claus Killer, Ricky Caldwell, has been comatose for six years, with a transparent dome affixed to his head by doctors. Wanting to contact Ricky, the eccentric Dr. Newbury begins using a blind clairvoyant girl named Laura Anderson to try reach out to him. On Christmas Eve, after a particularly traumatic session with Newbury, Laura begins to regret her participation in his experiment, but Newbury tries to convince her to keep trying, saying that they can talk more after Laura returns home from visiting her grandmother over the holiday. After Laura is picked up from the hospital by her older brother Chris, a drunken hospital employee dressed as Santa Claus wanders into Ricky's room and begins taunting him, rousing Ricky back to consciousness. After killing the Santa impersonator, Ricky escapes from the hospital and leaves a bloody trail as he hunts Laura and her family.
