Alfur Bakari and his friends are all baby elves in Santa's Christmas Village. Alfur is an adventurous elf born with blue fingers, who is to follow in his father's footsteps and come a baker elf. He is given a magical dough necklace that will help him grow into his magic, but when Alfur can't seem to master his magic, he begins to feel like a misfit amongst his friends. His final school project is a disaster, and after becoming the laughingstock of the school, he vows never to back and confesses to his mother that he wants to be a storytelling elf like his Aunt Zeeps, who was lost on Earth one Christmas Eve. His mother convinces him that he has twice the talent and can do both. Alfur accidentally finds his Aunt Zeepa's travel diary and devises a plan to find her with the help of his friends. He places a tracking device in Santa's sleigh, but the plan goes bad when Santa appears and Alfur hides in the sleigh, traveling to Earth with Santa and fall off the back. He wakes up in a park where he meets a dog named Crush and his human, Velve, at their fist annual Adopt-a-Dog on Christmas Day event. Alfur, determined to find his Aunt Zeepa, leaves to follow the clues of her diary. The clues lead him deep into the ocean, over the Amazon Jungle and through the Black Forest into a cave, where he learn his magic on Earth is fading. Feeling like a failure again, he returns to Crush and Velvet who want to help him find Aunt Zeepa. Velvet's friend, Felix notices Alfur's ears and tells him he looks just like the weird Christmas lady, Ms. Penny. Alfur has found Aunt Zeepa and his friends come to the rescue. They return to the North Pole, Velvet and Crush meet Santa, they have a big celebration and Santa rewards the elves for their talents. Alfur becomes Santa's official Historian and a great baker.
