It stars Will Ferrell as the film's central character "Buddy". As an infant in a New York orphanage, Buddy had crawled into Santa's bag on Christmas Eve, and Saint Nick unwittingly brought him back to the North Pole. Not knowing to whom the child belonged, it was decided that he would be raised by the elves, and it would never be disclosed to him that he was really a human. When Buddy overhears the other elves talking about him being human, he goes to his adoptive father for advice.

Buddy's adoptive father acknowledges that Buddy is a human, and tells him the entire story of how he got to be raised by elves. Most importantly, he tells Buddy about his human father, Walter Hobbs, who lives in New York City. Buddy soon decides to go off on a quest to find his father, which leads to all kinds of humorous trouble.

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