Christmas Evil, released in 1980 - also known under the title "You Better Watch Out" - tells the story of Harry Stadling, whose childhood discovery of the fact that legend of Santa isn't real - in the worst way - has disastrous consequences later in life. As a young child, Harry crept downstairs when he should have been in bed and saw Saint Nick - aka Dad - in flagrante with Mummy in the midst of the Christmas presents. As an adult, Harry runs the Jolly Dream Toy Store, and suffers the commercialistic attitude to the Yuletide season displayed by his family and co-workers, until he can't take it anymore and snaps.
One Christmas Harry puts on the Santa regalia and sets out into the night to divide the naughty from the nice... which is a great idea, a cool take on the superhero origin story and should be the jump-off point into a great collection of horrifying, comical deaths. But, unfortunately, the movie you actually get starts and ends as a good idea. It's hard to tell if the sudden jumps between comedy and horror are deliberate, and it gives the movie an uneven, sketchy tone that prevents you from getting immersed. Suspension of disbelief can survive a mediocre script and shoddy production values; but an uncertain, shaky directorial hand?
The rest of the movie consists of Harry handing out delights to the nice, to kiddies and the innocent, and slaughtering the guilty, until the townsfolk catch on. When they do, there's a show of the film's kinship with its early horror roots: Harry is chased down the streets by a mob with flaming torches, inappropriate to the film's setting but utterly at home in the scene from James Whales' 1931 Frankenstein, which the scene is a homage to. The film is further marred by a jarringly incongruous happy ending. It's worth checking out for major genre fans only.