Cruella De Ville asks her cousin, Selkirk Tander, to help find five Dalmatian puppies who have escaped to Fernfield; Lucky, Patch, Rolly, Freckles and Penny. Cruella offers to help find Air bud if he helps her. The five Dalmatian puppies run into the Air buddies while Selkirk and Cruella sends their henchmen to find both Air bud and the five Dalmatians.

Domino and Oddball come to town to celebrate Christmas with their Uncle Patch and their friends, the Air Buddies. Along the way, they meet up with Puppy Paws and his siblings: Noble, Charity, Hope, and Jingle. Puppy Paws wants to run away from the North Pole to be a normal puppy, but this may ruin the spirit of Christmas if he is not back home in time for the holidays.