In Home Ec class at school, the girls are tasked with crocheting used bottle caps together to make hot pads for their loved ones.
Mary Alice gives Ina-Rae, the only girl who's friendly to her, her hot pad because Ina-Rae's didn't turn out so well. She's glad that at least Ina-Rae is nice to her—since all the other girls are still giving her the cold shoulder.
The one thing that works in Mary Alice's favor is that she doesn't dress like a rich city girl. In fact, the best dressed person in school is a girl named Carleen, who has all sorts of fancy things like silk stockings.
For the Christmas nativity play, the teacher chooses Mary Alice to be the Virgin Mary. This really gets Carleen's goat, and Mary Alice is determined to do it right—and to make herself a proper costume.
When Mary Alice gets home one day, she finds that Grandma Dowdel has been out in all of her warmest clothes doing something—but she won't say what. Grandma is always mysterious like that.
Later, when Mary Alice is getting ready to go to bed, Grandma Dowdel tells her to get dressed to go out with her. It turns out that Grandma's been setting traps and killing foxes for their furs. This lady is nothing if not unpredictable.
Over the next few weeks, Mary Alice often goes out at night to help Grandma, even though she hates the sound of the foxes screaming when they get caught in the trap. (She's not particularly fond of the smell of the fox urine they use as a lure, either, but hey, girls committing crimes with their grandmas can't be choosers.)
Meanwhile, the nativity play practice is carrying on, and Mary Alice feels shabby in her robes made out of old bedsheets—especially next to Carleen, who's playing an angel and has an actual satin gown.
One day, Mary Alice comes home and sees that Grandma Dowdel is looking at a Sears catalog. She tells Mary Alice to pick out a pair of boots for Christmas, and they send in the order form.
On the night of the nativity play, Mary Alice gets ready—wearing her new shoes and her old plaid coat, which feels new again because Grandma has sewn real fox fur cuffs onto it.
For the most part, Grandma has been acting like she doesn't care about Mary Alice's big moment, but then she pulls out a halo that she made from pieces of tin cut into tiny stars. It obviously took her a long time to make.
When Mary Alice gets there, Carleen is all decked out in her finery with make-up on to boot. But Miss Butler, their teacher, makes her wipe off all the make-up.
During the nativity play, something quite unexpected happens. Mary Alice goes to pick up the baby Jesus doll, and instead finds a real live baby. What in the world?
The baby has one blue eye and one green eye, so Grandma Dowdel knows that it belongs to one of the Burdicks right away. This also explains why Mildred Burdick never came back to school after bullying Mary Alice: she was pregnant. Dun dun dun.
But the craziest (and most exciting) thing that happens is that Mary Alice's brother Joey shows up as a Christmas surprise. Turns out Grandma sent him a plane ticket, bought with all the money she earned from her fox furs.
What's more, Grandma has bought Mary Alice a round-trip ticket to Chicago so that she and Joey can go and spend some time with their parents.
But first, the three of them go back to Grandma's house to celebrate a magical Christmas together.