This year Hope Valley has something extra to celebrate. Lucas has inspired the town to put on its own Christmas festival just like the ones he visited when he traveled with his parents.

Everyone is making treats and the school class choir is singing and it's baby Jack's birthday.

Elizabeth's family used to hide a new ornament on the tree every year for her and her sisters to find.

Lucas urges Bill to try the sausage with his authentic Bavarian sausage.

Nobody advertised, but the town is booked for Christmas. There is even a line of people waiting for Queen of Hearts.

Henry, of course, calls attention to the seedier side of Lucas' good deed.

Faith calls Carson to share her travel plans. She'll arrive soon!

There is a young fellow in Hope Valley who doesn't have a lot of money, but he has enough to get the waffles that are being served.

Rosemary wants to go overboard on the spending for Jack's Christmas even though Elizabeth wants them to get only one gift. When they meet in the street, Jack and Bill continue to compete for Jack's attention.

Elizabeth is waiting for Jack to say his first word, so you know it's going to be pretty special when it finally comes!

Traveling salesman, Walter, arrives just in time to help Henry get the mustard stain off of his jacket. But the tidy miracle brush doesn't do the trick, and Scrooge points out a salesman is only as good as his product.

Nathan is put off by the holiday cheer because it brought crowds to Hope Valley, and they make him uncomfortable. But he can admit that at Christmas, they're nice.

When Elizabeth enters, there is another competition -- this time for her approval.

Nathan got Allie a charm bracelet for Christmas, and he got her a fly for fishing to add to it.

I have to face that Elizabeth looks on with wonder when Nathan is around.

Lucas is a bit overwhelmed with all of the guests and is relieved when Clara offers to help.

Leland doesn't approve of Rosemary's gift for Jack -- a train set. He's a little young for that, right? When Rosemary says she'll ask some of the mother's around town for advice, they both stop and realize what that means.

Allie made a wreath, so he takes down Bill's hat and puts it up. Allie wants to know when they get their tree, which will hopefully be taller than Nathan. He acquieses.

Elizabeth and Lucas talk about missing their families, and he shares memories of the exotic locations where he traveled. He particularly remembers in China when they released a lot of paper lanterns at dusk.

Nathan gets offered a position in Union City. He applied for it a while ago. He's still interested and takes the job. No way is he leaving Hope Valley!

Rosemary is checking out the sweet crafts the kids are making in the square. They're making ornaments out of corks and more.

Allie is so excited about her big fir tree. Elizabeth knows a place if he'd like her to show him. Absolutely.

He has a faraway look in his eyes (and is looking far away), so she asks if everything is OK. He says yes, and she looks sad.

Walter hawks his wares to the Christmas shoppers. He's having a hard time.

Bill is looking all over the place for something. Has he misplaced Jack's Christmas gift? Nathan shares that he's gotten a promotion to inspector. Bill congratulates him. They're both a little skeptical. Bill says some of the best years of his life were spent being an inspector. He's not looking forward to breaking in a new Mountie.

Faith has called Carson, so he's ushered to the general store by the operator. Faith's brother's wife is ill, and he had to cancel his trip. Faith has to stay to take care of her dad. They're both super disappointed.

Rosemary and Elizabeth have made a gingerbread house that is bigger than a dollhouse! Elizabeth says they should do that for Jack every year. While Rosemary hums, Elizabeth looks concerned. She just wants Christmas to be special for Jack.

Rosemary says having children must make Christmas different, and that makes Elizabeth feel bad that she brought it up. She's overwhelmed with everything her husband has missed.

Nathan reminds Allie that they've met a lot of nice people everywhere he's been stationed. But she reminds him of last year and boring speeches in the mess hall.

Henry runs into Walter again on his way out of town. Walter apologizes that his product didn't save Henry's vest and says someday he's going to dress just like Henry. Henry believes he will.

Allie is running out of ideas to make her ornaments different, and Elizabeth says when she was little, she put bells on hers. Woo hoo!

Jesse is bummed that he took off the entire week and Clara is spending all of her time helping Lucas.

Leland and Rosemary stroll with Jack talking about Elizabeth's sadness. They still have no idea what to buy the little guy, and Christmas Eve is the next day!

A couple of young ladies almost run into the street. For some reason, their intervention sparks excitement in Rosemary and Leland.

Lucas asks the towns kids to help him make magic. Even Florence is up for the ocassion.

Clara is running ragged trying to get orders for customers. Jesse says that's not very fair. She needs help. She hands him the order pad and kisses him on the cheek.

Leland approaches Jesse about being good at woodworking. Can he take on a little project for the two of them? Ahhh! They're going to make Jack a Hobby Horse!

Nathan, Elizabeth, and Allie are in the forest. Elizabeth talks about things feeling right and eyes Nathan with a sparkle in her eye.

Carson is going to surprise Faith by visiting her.

Henry doesn't understand why Lucas is so into the Christmas spirit thing. If it's not profit, it has to be something else. Lucas clucks his teeth and walks away.

Lucas thanks Jesse for helping. If Clara trusts Lucas, it must mean something.

Bill is at the cafe! I still miss Abigail. Bill is still looking for what he's lost.

Carson heads to platform two at the train station to board at the same time Faith arrives. Uh oh!

Elizabeth notes that Nathan isn't very excited for the Christmas festival. He likes things simpler. Fishing with Allie. Elizabeth's youth included a house full of relatives, sometimes up to 20 people. She never expected to be doing this on her own, she says. They're both trying to do a lot with a little.

She continues trying to figure out what's on his mind, but he continues to dodge the subject. Allie found her favorite tree.

Faith calls out to Rosemary who shares that Carson will certainly be surprised by her arrival.

When Bill says he checked everywhere for Jack's gift, Leland laughs that he didn't check everywhere or else he'd have found it! Bill doesn't find that very funny.

Elizabeth stays to help Allie and Nathan decorate their perfect tree. She gets caught under Nathan's arm in a romantic game of Christmas Tree Twister.

Fiona places a call to the train station to message for Carson as soon as the train arrives, and Faith calls her dad who chides her for not telling Carson.

Lucas wants to send people to the cafe for dinner, but it's closed tonight. Faith, though, has an idea.

Nathan and his sister had a tradition to save seeds from pine cones to plant in the spring. When she mentions putting down roots, Elizabeth notices his face again.

Everyone speaks poorly of Lucas for not knowing the festival would get so big. But how would anyone know visitors from all around would arrive?

Allie finds the promotion letter. She's excited because he's worked hard and deserves it. But what she doesn't know is that they'd have to leave Hope Valley. Her face falls, but she puts on a brave facade. After six years of moving, she's used to it.

Where in the hell are all of these guests staying? Queen of Hearts is packed to the gills and it's their third seating for dinner already that night. There is a line out the door.

Faith suprises Bill at the Cafe. He wonders if she can cook. Can she peel potatoes?

Fiona won't leave the phone because she's worried Carson might call. Henry was going to post a letter, and he was hoping to help feed the hungry guests. If nothing else, can he help pay for the goods? He slips his letter in the ledger book before they leave.

Elizabeth welcomes Henry to the community dinner. Everyone shared their food, and they all got something, too.

Lucas has had the kids create magic by way of lanterns for the town to send on Christmas Eve Eve.

Everyone is very excited about the possibilites outside the door. The kids are lighting the lanterns (which are huge!).

As Bill wonders what they are looking for, the lanterns begin to rise. It's beautiful!

Fiona is bummed that Carson never called. At that minute, Carson gets the message at the station. He calls, but nobody answers. And there are no trains heading back to Hope Valley until after Christmas!

While recalling their lovely evening, Elizabeth, Rosemary, and Leland happen upon a very sad Allie. She reveals the information about Nathan's promotion. Elizabeth is gutted. I bet this spurs her to tell Nathan how she feels.

Carson gets a ride from Walter back to Hope Valley. He's heading to his folks farm outside of Rock Creek for Christmas. They'll be driving all night.

The next day is Jack's birthday and Christmas Eve. Everyone begins descending on Elizabeth for the big day. Elizabeth tells Rosemary about Nathan's news. She wants to leave Jack for a half an hour to go see Nathan.

Walter and Nathan get a flat tire. Uh oh. Even worse, Carson was driving. For shame! They're a couple of hours outside of Hope Valley. Walter, meanwhile, has been meaning to get a new tire since his last flat. He doesn't even have a coat having sold it for gas money.

Carson asks Walter to stay warm where he is while he heads off to get help.

Elizabeth confronts Nathan who says he was going to wait until after Christmas to tell her. She's disappointed that he didn't tell her something was wrong. That's because nothing is wrong. He applied for the promotion, and nothing is holding them back. What about their friends, Elizabeth asks dolefully. Congratulations, she says, as she leaves.

Carson asks if he can borrow a woman's wagon. He has $20 and a watch to give to her and the kids. Upon the offer, she says to keep it and take the wagon.

Rosemary and Leland are so excited when they get Jack's gift from Mike. Oh. I thought it was Jesse. Oops!

Jack is still searching his office for Jack's gift when Molly offers him a Christmas cake. He finally asks her exactly what he was looking for having earlier asked if she rummaged through his desk. She found it on top of the desk, and when she saw what was inside decided to put it away for safekeeping. You're welcome. Merry Christmas, Bill.

Carson wants to check over Walter for his wracking cough. It will be his Christmas gift to the young man.

Fiona has good news for Faith. Carson got the message. Faith still worries since there are no trains moving.

Happy birthday Little Jack!

Florence relieves Fiona for Christmas, and they exchange gifts. But who wants to wait for Christmas morning to open gifts?? Fiona got Florence a sweet little Christmas ornament of a telephone. Florence's gift to Fiona was a "may we always be connected" embroidered item. Fiona took a chance on Florence, and for that Florence will always be grateful.

Bill finally gives to Elizabeth his gift for Little Jack. It's a compass. May you always find your way home, it says. It was Jack's. He gave it to him when he got turned around in the mountains. He thought it was Bill's fault they got lost, and he may have been right.

She can't accept it, she says, but Bill assures her he will remember Jack just fine. He wants Little Jack to have it so he can always find his way home with help from his dad.

Walter's cough is worse. It's time to get him checked out -- for the very first time in his life.

The kids are worried about singing in front of the crowd.

Elizabeth assures Allie she'll always have a place in her choir no matter where she lives.

Henry and Walter get reacquainted, and Henry can't believe Carson would drive Walter another couple of hours to get to his car. Henry offers to take Walter. Merry Christmas.

Fiona found a note at the infirmary. Good gracious. Has she taken off again? Nope. She's in the barn preparing the wagon. Sheesh!

Before the choir begins, Elizabeth reminds the town that home is truly where the heart is.

The kids barely crack a smile while singing, and Allie looks like she's going to burst into tears.

Nathan turned down the position, giving Allie the best Christmas gift ever. He wants to tell Mrs. Thornton himself.

Just then, Elizabeth spies Lucas by the tree and tells him he should be proud of what he did with the festival. He's happy everyone else was happy, but she notices he doesn't look happy at all. He doesn't want Christmas or at least the feeling of it to end. His family was always so busy except during Christmas. He wanted to bring the feeling he had with his parents to the rest of the town.

She tells him to look around. This is his family now, too. It's comforting to remember old traditions, but it's really important to create new ones, too. Nathan sees them talking and misreads the situation.

Walter can't believe that Carson intended for him to keep his coat. Henry wants Walter to call him in the new year. He knows people in Union City. Let's see if we can get him a better job.

Lucas doesn't know how to thank Jesse and Clara and finds them to be very lucky in love. They toast to Christmas and friends.

Allie tells Elizabeth about the promotion. Nathan looks on from afar and leaves without speaking to Elizabeth after they lock eyes.

Clara cooks the finest pancakes any of the guys have ever seen. Even Lucas is down for joining them.

Carson and Faith return the wagon. They've come bearing gifts and food from the pot luck.

Allie loves her charm bracelet. She wonders why there is a pot of dirt in a box. It's for the pinecone so they can plant roots.

It's time for prezzies.

Hickam made it, they announce. Jack jumps right on and begins swinging away. he's so cute!! And Elizabeth got him a little cowboy outfit for Christmas morning. He takes the hat off and swings it before saying Mama.