It's Peanut's first Christmas and he's very excited to open the gifts under the tree. Crackers explains that he must wait until Christmas and the dogs go off for their daily walk. But while Peanut and Crackers are having lots of fun with their friends at the dog park, someone sneaks into their house.

Meanwhile, happy to be left alone at last, laid-back cat Butter is so busy enjoying some peace and relaxation, he doesn't even notice that he's not alone. And when the dogs get home, it's not long before they sniff out the stranger living in their Christmas tree and bark a CODE RED!