A Southern minister is assigned to a poor church in California where the congregation is drifting away and the church itself is scheduled for demolition.

Christmas has arrived. As a little girl and her parents enter the room, the little girl finds all kinds of toys under the Christmas Tree. She immediately throws her old doll aside and starts playing with her new dolls. But that night she has a dream. Or maybe it isn't a dream?

The entire story of Christmastide is here depicted. The scene opens in a large boudoir of an apparently wealthy man's home. His children, assisted by their governess, are about to retire. Before lying down they hang up their stockings on the edge of the bed. The picture changes and night appears. We see the housetops of the town and angels are flying about depositing packages in each of the chimneys. (Edison Catalog)

A Christmas Dream tells the story of a local teenage girl who has had ambitions to go to a musical theatre school in London since she was eight years old. She is now 18 but her parents, who are both solicitors, want her and her twin brother to go to university and study law. The film shows the support she gets from her friends, boyfriend and her singing and dance teacher. They encourage her to follow her dream and go for it and have no regrets in later life.