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The Christmas season is in full swing in Manhattan and Vanessa starts things off by letting Dan know that she entered one of his stories to The New Yorker and it was chosen to be published. When Dan declares it as the best Christmas present ever, Serena realizes that the pressure is on to and that she has to come up with the perfect gift for Dan now.
Blair’s dad shows up for Christmas, but he does not show up alone as Blair expected, instead he shows up with his boyfriend Roman. Blair’s plan to convince her dad to stay in New York is twice as hard to execute with the boyfriend around all the time and being as nice as ever.
Over at the Humphrey’s the family is decorating the tree and opening Christmas cards when Dan comes across a private letter from Allison’s fling, Alex. Allison assures Rufus that she has ended things with Alex, but Rufus finds out otherwise when he runs into Alex and has a conversation with him.
Thinking Dan will appreciate material things, Serena splurges on a very expensive watch for his Christmas gift, but Dan tells her he can’t accept it. Dan and Serena then decide to set a fifty dollar limit on gifts and Serena realizes that she will have to go a non traditional route and find something Dan wants that she cannot buy in a store.
When Blair finds out about Roman’s old flame, she hires him to attend the family Christmas party in the hopes that it will upset her father and make him leave Roman. Blair gets the reaction that she wants, but not the result.
Blair’s father realizes that Blair just wanted to spend time with him and apologizes, making it up to Blair by showing Blair her room in his new villa. Things don’t go as well for Rufus and Allison who realize that they have grown apart.
With the help of Vanessa, Serena is able to come up with the perfect gift for Dan and gives him the white Christmas he has been dreaming of. Dan gets Jenny’s help and sneaks a Christmas tree into The Palace for Serena. It turns out to be the best Christmas for the both of them.
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