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One of Santa Claus' "brownies" (elves) introduces the story of the Fairy Snow Queen, who plays a trick on Santa Claus by bringing all the toys to life just before Claus is due to deliver them to children around the world. She shows Claus what she's done and the toys demonstrate their abilities. The toys are distraught when Claus says they must be turned back into inanimate objects in time for Christmas, but the Fairy Snow Queen comes up with a plan to make everyone happy.