The Woodcutters are a struggling rock band, unable even to pay their Roadies. That could all change tonight. They are scheduled to play a concert at The River, with a record producer in attendance. This morning's rehearsal ends when The Woodcutter's guitar player, Phoenix experiences another in a series of guitar malfunctions.

Phoenix heads down to The River to see if anyone there can help with his ax -- his guitar -- Musicians sometimes call guitars axes. The River staff is setting up for tonight and dealing with staff evaluation day. When Phoenix is viewed as a distraction, he is ejected from the club, but his guitar is left inside The River.

Try as he might, Phoenix is unable to get past The Bouncer to retrieve his guitar. A man comes out of The River, accompanied by his bodyguard. He introduces himself as "The Sprite." He has been given the impression that Phoenix may have been ejected as a thief. Nevertheless, he offers to go back into The River to look for Phoenix' guitar and to bring it to the Woodcutter's rehearsal garage.

After some hesitation, Phoenix explains to his bandmates and roadies that he has lost his ax in The River and won't be able to rehearse. Just then The Sprite and his bodyguard arrive with Phoenix guitar case. When they have gone, Phoenix opens the case to discover, not his old unreliable guitar, but a beautiful shiny gold guitar. Not just beautiful; it sounds great!

Phoenix wonders if keeping that guitar is the right thing to do. He struggles with his conscience in the form of an Angel and a Devil. Then the Angel reminds him of a certain Christmas Eve when Phoenix was young.

Phoenix and his sisters were camped out in the living room hoping to catch a glimpse of Santa. That was the year that Phoenix accidentally burned down the Christmas tree. But when his mother asked who did it, Phoenix lied and said it was not him. That night when Santa's Elves come down the chimney, everyone got the present they had wished for except for Phoenix, who got a lump of coal, because lying got him on Santa's Naughty List.

Phoenix ultimately decides to return the guitar and he takes it back to The River. The Bouncer still won't let him in, but The Sprite again offers to look for Phoenix' ax. He sends his bodyguard into the club. The Sprite has a talk with Phoenix about life, trust and honesty.

Later, The Sprite has found another guitar. This one is extremely special and even better than the last, though clearly not Phoenix's. Phoenix's conscience this time is different. The Devil has brought a second Devil, so that there will be one for each shoulder leaving no room for The Angel. In the end Phoenix remains honest and returns this guitar to The Sprite as well.

Phoenix is still without his guitar. His Roadies fear that tonight will be a disaster. As they transport the rest of their equipment to The River, they think about the terrible jobs they will have to do, since they can no longer afford to work for the Woodcutters without pay.

When the band is introduced, Phoenix explains that he has been unable to find his guitar. The audience groans. Just then The Sprite comes onstage. This time he has Phoenix' guitar! Not knowing if it will work, the Roadies hold their breath. The guitar works and the show goes on!

The Sprite comes back onstage and reveals himself to be the record producer. He explains that he had to be sure of Phoenix' honesty before signing his band to a record contract. He makes a prsent of the other guitars to Phoenix. All rejoice and live happily ever after.