SpongeBob is a yellow sea square sponge. He has blue eyes with six eyelashes (3 above each eye). His clothing includes a white shirt with white sleeves with a red tie, and a pair of brown pants with a black belt. He also has white socks and black shoes. He is seen with a santa hat throughout the episode.
In the beginning of the special, SpongeBob is acting as he usually does during the holidays. He flaunts around town cursorily spreading his cheer for the holidays, while Plankton is in his laboratory, unknowingly, only by Karen, baking Fruitcake contaminated with a substance known as Jerktonium (Jt). SpongeBob then visits Plankton, now riding on the Jerkmaker-9000, asking for a slice of fruit cake. Plankton sees SpongeBob is not being affected, asking if "his dander is up" or if he is feeling a little "surly" or a little "jerky". Plankton proceeds to force SpongeBob to eat some fruit cake, only for him to still not be affected.
SpongeBob then goes around town, handing out slices of the tainted fruit cake, causing everyone in town to become negative. SpongeBob tries to find a way to make everyone positive again, eventually, in his clumsiness, to find out the antidote for the happiness with Sandy's Christmas Magic Analyser. The antidote turns out to be a collection of notes, which follows the beat of "Don't Be a Jerk (It's Christmas!)".
SpongeBob eventually cures everyone, yet being too late in his efforts, for everyone is already on the naughty list, except for Plankton. ToyBob then comes, easily defeating SpongeBob in his attempts to destroy Santa. Santa then proceeds to hide inside of the Krusty Krab, only to be taken out by the Robot Sponge. SpongeBob then returns, using the Jerkmaker-9000 to defeat ToyBob, causing it to self-combust. Santa's Elves find a recovered piece of the robot, which reads that the piece must be returned to the Chum Bucket, revealing Plankton's plan.
In retrospect, SpongeBob ends up curing everyone, though he is the one that turned everyone negative unintentionally, foiling Plankton's plan, and getting everyone, including himself, off of the naughty list.