Der Weihnachtsmann und seine Elfen bekommen Besuch von einer Star-Reporterin. Diese will eine heiße Story schreiben und fragt den Weihnachtsmann nach seinem aufregendsten Abenteuer. Der Weihnachtsmann erzählt also nach kurzem Überlegen, wie er vor 1500 Jahren mit Hilfe von Merlin, dem Zauberer, dem jungen Artus das Schwert Excalibur geschenkt hat. Und das war gar nicht so einfach, denn da gab es auch noch den Grafen Grantelbart ...
When a famed reporter comes to the North Pole to interview Santa on his greatest adventure, he tells her about his time about a thousand years ago. When his tower receives a letter from a boy named Arthur, asking for Excalibur, Santa and Guilfi head off for England. After being mistaken for a jouster named the White Baron and defeated Gruzzlebeard, who was a Vi-count, he learns that Excalibur is a sword that is held by Merlin. In the enchanted forest, the two met the famed wizard who doesn't have the sword; the Lady of the Lake has it. They managed to get the sword after solving a riddle about the wind, but Guilfi accidentally mentions Merlin, which he told them never to say his name in front of her. Santa was able to talk to the two of them, convincing each other that they made the sword in the first place. Just as they were bout to deliver Arthur's present to him, Gruzzlebeard steals it only for Merlin to put in a stone. He then decrees that on Christmas Eve, the one who pulls it out of the stone shall become king of England. After numerous knights (comically Gruzzlebeard) tried, Arthur was able to pull it out. with his tale concluded, the reporter asks for the group's picture, which might reveal too much. Luckily, Santa had magically erased their photo.