Christmas in Candle Cove is the eighth episode of the second season.
Janice and the crew have a Christmas in Candle Cove. They all dance and sing and make merry until the Skin-Taker shows up and butchers the whole cast with a sharpened femur. Then Janice wakes up to find that it was only a bad dream. The rest of the crew then tries to comfort her.
They then begin to wonder where Milo went, and why he has not joined them for Christmas.
Poppy then opens a present to find Milo's hair inside. Poppy, recognizing this, begins to scream and cry. On the bottom of the box is a note from the Skin-Taker, informing him of his brother's treachery.
The Snowlems try to comfort Poppy by giving him presents, but nothing seems to work. Janice has not yet found out what happened, though, so Poppy asks them to take Janice out to play in the snow, and keep her from finding out what happened, since she was already trying to recover from a nightmare.
They take her ice-skating, and discover a rather deformed looking reindeer who was seperated from Santa's sleigh. They then go on a trip to get the reindeer back to the North Pole, and successfully reunited the creature with Santa and the other reindeer.