Offended parents and others protested this slasher film when it was released in 1984 because it portrays Billy (Robert Brian Wilson) as a toy-store Santa Claus who goes on a rampage and axes people to death while still in his Santa garb. Four sequels prove the adage that there is no such thing as bad publicity.
When Billy was just a boy he saw someone dressed as Santa murder his parents at Christmastime.
Billy's stint in an orphanage did nothing to unwarp his mind (he is tied to his bed for misbehavior), and when he starts playing Santa in the store -- much against his wishes since he is deathly afraid of both Christmas and Santa Claus, he first only frightens the children who come to see him.
Then his mind snaps, and he repeats the scene he saw as a child, on one person after another, in full gory color.