Rocko's Modern Christmas!: Can't Squeeze Cheer from a Cheese Log! (also known as just Rocko's Modern Christmas) is the sixth episode of the second season of Rocko's Modern Life, and the 36th episode overall, as well as the Christmas special of the series.
On Christmas Eve, Rocko laments the condition of O-Town, in which a cloud is struggle to eject snow from. Suddenly, he catches a glimpse of new neighbors setting up decorations in an empty house from across the street. He decides to get Heffer and Filburt to decorate his house to have a party to make his holiday the best ever. As it begins to storm, Ed laughs at the misery this year's Christmas is suffering. He notices the decorations of the house from across the street and becomes enraged.
Later, Rocko calls Heffer and Filburt and asks if they could come to the party he's planning, which starts at 8:00 and soon, everyone else gets invited to the party. When Rocko gets a call about this, he mails the invitations and goes to the mall with Spunky tagging along. While walking, they notice an elf from the decorated house across the street. The elf hides behind the mailbox and Rocko and Spunky continue their walk, with the elf following behind.
At the O-Town Mall, Rocko goes to a tent to purchase a tree and finds that Filburt is selling them along with Heffer. Rocko chooses a tree and heads inside the mall. Spunky tries to go to a line (which consists on seeing a fruitcake man), but Rocko inhibits him, saying that the line is too long. The two go to Waldoons Variety and the elf from earlier, who has followed Rocko all the way to the mall, finds a shoe store, only to get picked on by a group of crocodiles. Rocko notices this and tells them to pick on someone their own size, prompting them to tower over him. Luckily, he digresses by asking if they have a shoe in an 11 1/2. He throws the shoe and the crocodiles chase after it. Rocko then finds the shy elf hiding in another shoe and takes him home as he and Spunky leave the mall.
Rocko returns the young elf to the house, in which another elf offers him a visit inside of and a number of elves are inventing toys. Rocko asks the elf where he could find Christmas cheers, which consists on celebrating the spirit of the holiday. The elf introduces him to the elves named Pliers, Screwdriver, Nailgun, Hammer, Drill, Crowbar, Jigsaw, and Mango. The elf also introduces Rocko to the most famous elf of all: Mitch, who had three legs and was the first elf to make it snow. As he leaves, he invites the elves to his party.
Ed watches the elves through the window in disgust and refuses to attend Rocko's imminent party. He storms outside and mutters angrily. When Filburt leaves Rocko's house, Ed tells him that elves carry foot fungi, causing Filburt to break out in a blistering rash. When he returns to his trailer home, he tells Dr. Hutchison that he won't make it to Rocko's party and soon, the word is spreaded around O-Town after hearing about the foot fungi Ed mentioned earlier, much to Ed's amusement.
At Rocko's house, the wallaby waits for the guests to arrive, and as the hours elapse, he becomes little more than confused that no one has showed up and feels upset that he didn't get any Christmas cheer. Just then, the shy elf comes over and Rocko invites him in. Rocko reads the elf a story and falls to sleep as he finishes. During the night, the shy elf tries to makes the cloud sprout snow out of it. But the cloud doesn't budge. So when the elf remembers how Rocko saved him from the crocodiles back at the mall, he realizes that love is the ingredient for Christmas cheers and causes a heart to float onto the cloud, making it sprout snow onto Rocko's house.
The next morning, during Christmas Day, everybody is at the front of Rocko's house and Mitch, the three-legged elf, shows up and reunites with the elves. He states that the reason he went to seclusion is due to the lack of Christmas cheer, thanking the shy young elf in the process. When Rocko shows up at the door, the others discover that he was the one who shared the Christmas cheer with the elf and apologize to him for ruining his party with rumors. Everyone attends the party, with the exception of Ed, who is little more than annoyed. The young elf shows up at his doorstep and gives him an invitation right before hitting his knee with a hammer in reprisal for starting the rumor. Ed chases after him and ends up hanging from the lights onto Rocko's ceiling. Rocko thanks the young elf and says the Christmas cheers was inside everyone all along. Rocko then gets a call from his parents, who wishes him a Merry Christmas, and everyone continues to party. After the end credits, the elves chase after a santa robot and the next day elapses, with everyone throwing their trees outside the day after Christmas.