Brooke assures a deflated Ridge that they will get through to Nick, Jackie and Stephanie about raising their child together. Although Ridge claims he is going to stand beside Brooke regardless of all that has happened, he pulls away from Brooke when they are about to become intimate. Ridge tenderly tells Brooke he still loves her and that they will get through this. Meanwhile, Stephanie offers her support to Nick and states that she would like Brooke to raise the child with him. Nick insists that he supports Brooke's decision to stay with Ridge and that he is committed to raising this child even if it is with shared custody between Brooke and Ridge. Stephanie explains that she does not think Ridge and Brooke's marriage will survive that arrangement. Bridget and Oscar tell Eric of their engagement. Although Eric gets upset because Oscar lets it slip that Deacon proposed to Bridget, he also expresses his pleasure that Bridget is open to a commitment again with Oscar, who he feels is a good man.

Sharpe Designs move into their offices at Forrester Creations. Deacon, Sally and Amber express their confidence in the company's future while Eric and Thorne warily welcome them. Bridget arrives and announces that she will be supervising Deacon's physical therapy. Eric and Thorne worry that Deacon will try to manipulate the situation and decide something has to be done. Ridge congratulates Oscar on his engagement and offers him a job at Logan Designs. While Oscar is considering the offer, Eric calls Ridge saying that he wants Oscar to work for him at Forrester so that he can keep an eye on Deacon. Meanwhile, Brooke confides in Jackie that Ridge was unable to make love to her the night before. Jackie is not surprised by the troubles between Brooke and Ridge, given the strain on their marriage right now. Jackie persuasively reminds Brooke of all the wonderful times she had with Nick. Brooke tries to defend her marriage but ends up breaking down.

Christmas cheer rings throughout the Forrester House as Eric plays holiday songs on the piano. Eric and Stephanie are excited to spend the day with family. Brooke, Ridge, Massimo, Jackie and Nick cheerfully arrive bearing gifts. Thorne and Darla arrive with sad faces telling the group that Sally is depressed and refused to join their celebration. Meanwhile, Sally sits alone listening to Macy's Christmas songs and looking at photo albums thinking about the loved ones she's lost. Stephanie arrives and tries comfort Sally but Sally is still not willing to leave. Stephanie hands her a small gift box and supportively squeezes her hand before leaving. Sally unwraps the gifts to find a heart-shaped locket containing pictures of herself and Stephanie and is deeply moved. Stephanie rejoins the family and explains that Sally would not join them. Suddenly, there's a loud knock on the door. Sally appears in a big red Santa suit with the locket around her neck. Everyone joyfully greets Sally as she begins to sing, "Santa Claus is Coming to Town."

Due to the Christmas holiday, today's episode was preempted for special programming. There will be no lost episodes as a result of this schedule change; Friday's show will pick up where Wednesday's show concluded.

On behalf of everyone at Soap Opera Central, have a safe and Merry Christmas.

Massimo tells Brooke he hopes she will raise her child with Nick. Brooke argues for a future with Ridge, insisting the family can survive. Massimo implores her to do what's best for the whole family not just herself. Meanwhile, Ridge approaches Nick with adoption papers. Nick refuses to give up his child. Ridge gets angry, saying he feels trapped between losing his brother and losing the woman he loves. Just then, Brooke enters announcing she knows what to do. Eric offers Oscar a job to keep Deacon at bay. Oscar realizes Eric has the right idea and accepts. Deacon is depressed and dismissive about physical therapy. Bridget worries about his mental state. Deacon is worried that he'll never again be a whole man but agrees to work hard at Bridget's encouragement. Thanks to Bridget's massage, Deacon is thrilled with a breakthrough that he will be able to function sexually again.