On Christmas Eve at an orphanage, a baby boy crawls into Santa Claus's sack and is unwittingly transported back to the North Pole. When discovered at the workshop, the elves name him "Buddy" because he is wearing "Little Buddy Diapers", and he is adopted by Papa Elf.

Buddy grows up at the North Pole believing he is an elf, but due to his human size is unable to keep up with the other elves and demoted to the demeaning job of toy testing. When Buddy overhears that he is a human, Papa Elf explains that Buddy was born to Walter Hobbs and Susan Wells, and given up for adoption. Susan subsequently died and Walter, who now works for a children's book publisher at the Empire State Building in New York City, is unaware of Buddy's existence. Santa reveals that Walter is on the naughty list due to his greed and selfishness, but suggests Buddy could help redeem him. Read more on Wikipedia.