Christmas Eve, 2001 - Ethan Miller (Joseph Gordon-Levitt) just lost his parents in a car accident. His best friends Isaac Greenberg (Seth Rogen) and Chris Roberts (Anthony Mackie) stay by his side and start a tradition to hang out every Christmas Eve. In 2008, while out at a bar, the guys meet a woman that tells them they came from the craziest Christmas party ever - The Nutcracker Ball. For the next few years, the guys try to find out where the party takes place, but they never succeed.
In the present day, Chris is now a famous football player that secretly uses steroids while Isaac is married to Betsy (Jillian Bell) and is expecting their first baby. Ethan is a struggling musician that has recently broken up with his girlfriend Diana (Lizzy Caplan) and works at a hotel dressed as an elf where he gets chewed out by his boss (Randall Park) for not acting enough like an elf. While tending to the coats, Ethan finds something in one of the pockets - three tickets to The Nutcracker Ball. Excited, Ethan runs out of work with the tickets. He calls the number on the tickets to find out the location of the party, only to be told by an automated message that the location will be announced at 10 PM.
Isaac is at a party hosted by Betsy's sister Cindy (Helene Yorke). Ethan, already a little drunk, shows up before Chris arrives. Isaac and Chris want their yearly tradition to end now that their lives are moving in different directions, but they don't think Ethan is quite ready. Before they head out for the festivities, Betsy gives Isaac a box full of every drug known to man - weed, coke, shrooms, molly, etc.
Since Chris is the new face of Red Bull, he gets a huge limo to take them around for the night. The guys go in front of the tree in the city where Ethan shows off the tickets to his buddies. They plan to kick off the night by going to FAO Schwartz and dancing on the piano like Tom Hanks in "Big" to Kanye West's "Runaway". Chris calls his football buddy Tommy Owens (Aaron Hill), who is attending The Nutcracker Ball and requests that he bring weed. The guys call their dealer Mr. Green (Michael Shannon). He meets them in front of their old high school, and Chris has to go into the car to get the weed. Mr. Green shares some weed with Chris and tells him to go to a party he's throwing later, and to tell Isaac that he'll see him later.
The guys go to a karaoke bar where the three of them sing "Christmas in Hollis" while wearing three festive sweaters that Ethan wants them to wear. They are met by Diana and her friend Sarah (Mindy Kaling). Ethan and Diana awkwardly catch up while Isaac is already tripping on shrooms. He runs into the bathroom to do coke and balance himself out, and then he makes a crazy video expressing his fears over becoming a dad. When he goes back to talk to Sarah, he gets them both drinks but his nose starts bleeding and a drop falls into Sarah's drink. She has a sip and doesn't realize what happened until Isaac's nose bleeds harder and he admits he did coke. Outside the bar, Chris talks to a fan named Rebecca (Ilana Glazer), who admittedly hates Christmas. The two have sex in the bathroom.
Afterwards, Ethan calls the number on the tickets again and learns the address of the party. Chris then realizes that he doesn't have the weed on him anymore and that Rebecca must have stolen it from him during sex. They contact Mr. Green again and must wait for him in from of Chris's mother's house. Knowing Mr. Green will take a while, the guys go inside and quietly play N64. Isaac then goes to get the weed when Mr. Green shows up. He shares weed with Isaac and gives him a glimpse into the future. The two of them are at a strip club, and Betsy is sitting in the front. The dancer they are watching happens to be Isaac and Betsy's 18-year-old daughter, horrifying him even further about having a kid.
When Isaac goes back inside the house, his phone's ringtone goes off, waking up Mrs. Roberts (Lorraine Toussant). She feeds the guys while Isaac continues to trip out. He then looks at his phone and receives a dick pic from a guy named James. Confused, Isaac responds and is propositioned by James. He then realizes he took Sarah's phone by mistake, and if Sarah is still upset about drinking Isaac's bloody martini, she will probably show Betsy the video Isaac made. Meanwhile, Chris tells his mom how Ethan is not over Diana, to which Mrs. Roberts states that he ought to take the opportunity on Christmas to make it up to her.
After the guys leave, they spot Rebecca on the street. Chris forces his driver (Nathan Fielder) to chase after her to get his weed back. The driver runs a red light and the limo gets struck by a car. The guys run out and try to take a sleigh to catch up with Rebecca, but it's chained to a lamp post, causing the guys to go flying when the reindeer pull it. Isaac gets dragged across the street until he hits some cones. Chris runs after Rebecca himself, chasing her to the rooftop of a building. When he catches up to her, she tells him that he should go spend time with his friends instead of worrying about the weed. She then jumps off the building and lands in a dumpster before disappearing.
Isaac goes to a church where he starts talking to the nativity display. He runs into Betsy and her family, who invite him to Midnight Mass, despite Betsy knowing how fucked up Isaac is. He continues to trip out in the church and hallucinates that a baby is cursing at him. He then panics when he sees Jesus on the cross and thinks that everyone is judging him because he's Jewish. Isaac gets nauseous and runs out to puke in front of the whole congregation. He runs away.
Ethan wanders the streets alone and runs into two drunk guys (Jason Mantzoukas and Jason Jones) both dressed as Santa pissing in the street. Ethan criticizes them for mocking a Christmas tradition. He ends up getting into a fight with them, leaving him disgraced. He gets a phone call from Diana, who is already at The Nutcracker Ball, asking if Isaac has Sarah's phone.
The guys meet up again and get on the subway to head to the party. Ethan is pissed at them for leaving him alone, and he argues with Chris as he refuses to wear his "Black Santa" sweater.
The guys go to a bodega that holds a secret entrance to the party. Isaac returns Sarah's phone and gets his back. He then finds out that the James who sent the dick pics is none other than...Franco. He is still interested in sharing his dick with Isaac, though he declines. Chris runs into his football buddies and sees that they already had a ton of weed. They then make fun of Chris for the video of him performing karaoke with Ethan and Isaac. Ethan then spots Miley Cyrus and asks her to help him out with Diana, knowing she is a huge fan of Miley. Thinking Ethan wants to propose, Miley agrees to help. She gets onstage and performs "Wrecking Ball" with Ethan's help. Ethan then gives an impassioned speech to Diana and proposes to her. Under pressure, Diana says yes. However, when she pulls Ethan aside, she makes it clear that they are not engaged and that he cannot use her as a lifeline because his friends won't continue the tradition.
Isaac, still tripping, accidentally knocks some people over with decorations and ends up impaling Tommy's hand with a broken glass. When the others try to beat him up, Chris threatens to film them and use his social media status to ruin them. They try to run away, but security takes them out of the party.
Ethan goes on the roof in shame. He is encountered by Mr. Green, who has been hosting The Nutcracker Ball for the last 20 years. He gives Ethan a joint to smoke, and we see the guys on the first Christmas Eve after Ethan's parents died. Chris and Isaac went to his house to cheer him up. Ethan broke down crying and the guys stood by his side where they shared a joint. This brings Mr. Green to tears, and he tells him to rejoin his friends. Ethan sees the guys arguing with the bouncers and he goes to join them.
As the morning hits, the guys reconcile, but Isaac sees that he has 96 missed calls from Betsy. He gets another calls and hears she is going into labor. The guys race to the hospital and takes Mr. Green's car. Mr. Green decides he's earned his wings, which sprout from his back so he can fly away. The guys make it to the hospital, only for Isaac to learn from Cindy that it was just a false alarm. He then joins Betsy, and he shows her the video he made. She laughs at it and admits that she is just as terrified to have a kid as he is, but they know they'll work together to raise the kid when it is born. He's STILL tripping, so he sees Betsy look like a dragon.
The guys spend Christmas at Isaac's home with the family. Chris goes to have dinner with his mother later where he admits to his steroid use. Ethan goes to Diana's parents' house and apologizes for how he acted and for not being ready to get serious. Diana admits she missed Ethan and always asked Betsy about him. The two kiss and she invites him to finally meet her parents.
One year later, the guys and their loved ones are spending Christmas together. Isaac's baby can't sleep, so the guys go serenade her with "Christmas in Hollis". The baby claps to it, and the story ends, which was all told from a book read by Santa (Tracy Morgan). He is sitting with his elves and Mr. Green, who is his son. Santa then decides to kick off a little Christmas party of his own.
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