As Christmas draws near, the zone commander, Haverill, starts to come down on Lt. Fancy about his work skills and Sipowicz later intervenes and threatens Haverill to lay off Fancy or he will reveal some incriminating evidence about him being a racist. Meanwhile, Kelly and Sipowicz investigate the kidnapping of a doctor's daughter. Janice must pass some more information to the mob about the station's moves and wonders how she will get out of this situation. Also, Martinez and Medavoy question a woman and her young son who claim to have been robbed by a man who picked them up while they were hitchhiking in North Carolina. But Martinez later discovers that the woman, Kathy, is not who she claims to be, which leads to a hostage situation, involving Donna, at the station. Sipowicz reluctantly plays Santa as the precinct's annual Christmas party, and Martinez receives his gift from Lt. Fancy when he is promoted to detective, while Medavoy panics when the station's pet cat eats the Christmas rabbit, and Kelly visits his Alzheimers-stricken mother who resides in a nursing home.

The mob hit man who killed Giardella and who Laura can identify, is trapped on the roof of the building with a hostage. Martinez works on his first detectives case, which involves a fake ATM machine taking peoples money. Meanwhile, Fancy and his wife prepare to face a court date when a foster child they've been caring for is ordered back into custody of the real mother who's just been released from a drug rehab program. Sipowicz and Kelly investigate a shooting of mobster Tommy Linardi, whom had taken over the late Angelo Marino's organization, in which turns up a notebook that Marino kept which has Janice's name in it. Janice asks Kelly for help who decides to steal the notebook to protect her from further investigation to Marino's murder, while Fancy again locks horns with Inspector Lastarza over the handling of the case.