Hearth's Warming is just a couple days away, but as everyone is preparing for the holiday, Twilight finds herself in a mad rush to get everything done in time (grading papers at the school had reduced her free time, and with Shining Armor, Cadance, and Flurry Heart coming over leaves her with even more things to get done). As her friends all get caught up in it as well, Applejack offers a solution that one could easily imagine such a large family as her's has done before: giving only one gift to only the individual whose name is blindly picked from a hat (while also keeping secret who they will be giving that gift to). The main 6 (plus Spike) agree to the idea and the names drawn are; Twilight gets Pinkie, Pinkie gets Twilight, Rarity gets Applejack, Applejack gets Spike, Rainbow Dash gets Fluttershy, Fluttershy gets Rarity, and Spike gets Rainbow Dash.
Spike is so desperate to give a gift to Rarity that (after asking Applejack to clarify the rules) he first must figure out who got Rarity, and upon discovering that Fluttershy has it immediately trades with her, so now Fluttershy has Rainbow Dash and Spike has Rarity. After that extra effort, he goes around town and quickly finds himself overwhelmed with trying to find what could be a good enough gift for Rarity. Eventually, he decides to just return home and make his own gift, but has ended up so tired that he falls asleep halfway through his effort.
Rarity had already mail ordered a specially designed western hat for Applejack, so she is convinced that all she needs to do is wait for it to arrive. However, when the package doesn't arrive, she is forced to ask Derpy at the post office for where it went, only to find out that it was mistakenly sent to an acorn farm (anyone who's dealt with poor customer service can probably relate to Rarity in this scene). Once she arrives at that house, the family who lives there are thrilled to learn who had ordered that hat, because the young colt had been struggling to figure out who he is and now had finally discovered his calling in life lies with fashion. After some friendly talk, the colt acknowledges that he was not the intended recipient of the hat and offers to give it back to Rarity, but after seeing how happy it made him, she decides to let him keep it, even though it leaves her with nothing for Applejack.
After trading with Spike, Fluttershy meets up with Applejack, and when neither of them can figure out what to get in town, Fluttershy suggests going to Rainbow Falls, where she had gotten plenty of Hearth's Warming gifts before. But just as Fluttershy is about to grab an ideal gift for Rainbow Dash, she finds herself following a crowd who are fascinated by "this year's hottest toy" (actually a very shoddy doll that says questionable remarks) and the suspicious salesponies convince her to buy one with all her bits. When she shows it to Applejack, the later immediately points out what a terrible mistake the former had made, and they soon discover that the saleponies are none other than Flim and Flam in disguise, intending to use their ill-gotten profits to expand their resort. Fluttershy and Applejack understand they can't force the other ponies to not buy those awful dolls, so instead they put on a little act pointing out to everyone why "this year's hottest toy" is not necessarily the ideal gift for anyone. Although they successfully expose yet another Flim and Flam scam, they had run out of time to find any gifts for Spike or Rainbow Dash, so they decide to settle with the poor quality dolls they got as at least something to give.
Pinkie Pie had planned a bunch of matching gifts for all of her friends and finds herself super frustrated that she must now give only one gift to Twilight. After talking about it with her sisters, she decides to seek advice from the yaks, who always talk about being best at everything. However, Prince Rutherford secretly reveals to her that the only thing yaks don't consider themselves best at is gift giving, but he does offer her secret information on a secret location far to the north where she could obtain the best gift ever. When she arrives, she finds a house inhabited by three magical reindeer. (I can't remember which is which, but their names are Aurora, Bori, and Alice (I'm sure you can figure out what those names together reference), the oldest specializes on the past, the youngest specializes on the future, and the middle one specializes on the present.) The reindeer give Pinkie what they know will be the perfect gift for Twilight, while also telling her a special message that she can't quite figure out.
Twilight is naturally obsessed with finding the perfect gift for Pinkie Pie, and after some extensive research decides to bake pudding following the exact recipe done by Chancellor Puddinghead at the earliest Hearth's Warming celebrations. However, she spends so much time making that decision and gathering ingredients that she has gotten almost no progress on decorations when Shining Armor, Cadance, and Flurry Heart arrive earlier than originally planned. Despite her denial, they can easily tell she's obsessing over something. When her efforts to perfectly make the pudding causes her to miss out on spending time with them as a family, Shining Armor and Cadance have a talk with her, and she finally agrees to set aside her gift effort for the moment, unaware that Flurry Heart had decided to randomly add ingredients to the pudding.
Rainbow Dash is annoyed that Fluttershy wasn't specific about any likes or dislikes, but when she decides to just get a simple candle for her, Discord shows up to point out that, as a dear friend of Fluttershy, he knows it would not be an ideal gift for her. Rainbow tries a few other ideas, only for Discord to discourage her from all of them. Discord eventually convinces Rainbow to accept his advice, so he brings her to a forest to find a mouse-like critter for Fluttershy's animal sanctuary. But as soon as they return to meet with the others, Discord (being the troll he is) had failed to mention that particular critter turns into a giant monster after sunset.
When everyone meets up at Twilight's castle to exchange gifts, the first few to arrive are disappointed to have nothing to show for their efforts, then the rest end up being followed by trouble, with the mouse monster coming from outside and a magically enhanced flood of pudding coming from inside. As the monster is distracted by Spike covered in shiny materials from his gift, Discord reminds Fluttershy to do what she does best, and she is able to calm the beast down. As the magical pudding threatens to engulf everyone, Pinkie opens her special gift from the reindeer and it turns out to be the exact ingredients needed to disable the magical effects of the pudding. Later, as everyone settles down for exchanging gifts, despite not having much to give, everyone seems to be okay with the results. When Pinkie mentions the special message she was told by the reindeer, Twilight realizes that it was a riddle, and the answer to it is that friendship is the best gift ever.
Well, seeing how long this review turned out, I think it's obvious there sure was a lot going on. In addition the all the major events I just mentioned, I did like some of the minor stuff going on as well. It seems that after having the Apple family celebrate at the Pie family's home previously, this year the Pie family is celebrating at the Apple family's home, with the addition of Grand Pear and Big Mac's girlfriend Sugar Belle. We also got a brief glimpse of Starlight celebrating the holiday with Trixie. I also liked how the three magical reindeer lived in a place that would make most of us think of Santa's place at the North Pole. And one thing I particularly liked was how in the opening song we saw the Young 6 (in winter clothes) boarding a train to return to their homes, and in the closing song we saw among the many highlights were scenes of places like Yakyakistan and the Changeling Kingdom celebrating their versions of the holiday. All in all, definitely a worthy holiday special for this show.