Michael and Holly share many similarities, such as their social awkwardness, sense of humour, and a history of getting ostracized by other people. Their likeness had previously made all the things that are wrong with Michael transparent to Holly, and also led to them becoming a functional couple. After David Wallace found out about their relationship, he transferred Holly to the Nashua branch, which ended up in Holly and Michael breaking up. Since then, Michael has been hung up on Holly, and never gave up hope that they could be together. In Classy Christmas, Toby announced that he was going to be on jury duty for the Scranton Strangler's trial, which meant that he was once again going to be replaced by Holly. Michael could not be any happier. Enraptured, and determined to make a good impression on Holly, Michael delayed the Christmas party, hired a musician, and put aside his Santa costume for something that looked like the holiday version of Date Mike.
This episode has Pam being a connecting point between the multiple plots, but without her having much of a plot for herself. Her own story was limited to disbanding the party planning committee, and giving a comic book to Jim as a Christmas present. As for Jim, his feud with Dwight continued to a ridiculous extreme. Unfortunately for Jim, he also found himself as the loser in the feud, as he was repeatedly outwitted by Dwight in their snowball fight. Jim's only attempt at offense consisted of whipping a snowball with a lacrosse stick, which ended up breaking a window, and left everybody in the cold. By doing this, Jim took a step closer to his worst nightmare of increasingly having more in common with Michael, as Michael had also broken a window in an exceptionally stupid way. At the end of the episode, Jim had been so traumatized, that not even having Pam by his side could stop him from preemptively attacking all of the snowmen in the parking lot. The scene of Jim losing it against all of the snowmen is probably one of his funniest scenes in the entire series.
The snowball fight found itself in the middle of a peace making attempt by Michael and Holly. This scene established three key points. The first is that Holly is not just a foil for Michael, but also for Toby. When there is a problem, Holly is quick to address it, whereas Toby prefers to keep everything in a box (as seen in Conflict Resolution). The second point is the crossing of the snowball fight plot, with the return of Holly. Any time two or more separate plots cross each other, and leads to more build-up and a better climax, it is an indication of good writing. The last important point unveils the side of Michael that he never had a need to show to Holly until this meeting. When Michael was forced to confront his denial about the possibility of anything happening between him and Holly, he acted with his standard immaturity and ineffectiveness. This time, he destroyed and discarded one of Holly's Toy Story figures that was given to her by Ajay. Michael then cranked up his games in the meeting and dug himself deeper, by fabricating a fake New York girlfriend story in an attempt to make Holly jealous.
It did not take long for Holly to address the office on her destroyed toy, only to find out that Michael had also made up the story of his girlfriend. The fight continued, as Michael got upset at Holly for not wanting a relationship after they were separated, yet she maintains a relationship with Ajay after she got transferred back to Scranton. Michael's delusions came out, as he spoke of all the work that went into the Christmas party just so that he could impress her, and when he referenced how the two of them would have children together. As Michael retreated to his office, Erin quickly displayed her loyalty to Michael as she blocked Holly from following him. It was also implied, but never stated in this episode, that Kevin still holds a grudge against Holly for mistaking him as being mentally challenged, as he too came to Michael's defense quite quickly.
This is where the plot of of Pam encouraging Darryl to bring his daughter to work for Christmas comes in, and crosses with story of Michael and Holly. As Michael was leaving the building, Pam let him in on the ultimatum, and how Holly wants children, to give him a reason not to give up. After Michael walked back inside with Pam, he attempted to re-gift the Hello Kitty laptop cover to Kelly, only to overhear Holly telling Ajay a lie about how the toy was damaged. By the end of the episode, Michael is back in his Santa costume and role, talking to Darryl's daughter. This shot is framed with Holly looking on, as Michael unintentionally showed his ability to get along well with children, making it reminiscent of the scene with Carol and the children at the ice rink.
With half a season left for Steve Carell to be on the show, and Amy Ryan being confirmed for a number of episodes this season, it is expected that Michael Scott receives a form of closure, just as David Brent did in the BBC version of the show. Though the American version draws a lot of ideas from its British counterpart, it is deliberate in not being an exact clone of it. It is obvious that Michael and Holly will eventually find their way together, but it is how they do it, and the reasons for Michael exiting the position of Regional Manager that remain in question.