Christmas Evil (originally titled You Better Watch Out, and also known as Terror in Toyland) is a 1980 American slasher film[4] written and directed by Lewis Jackson and starring Brandon Maggart.

In suburban New Jersey, on Christmas Eve 1947, a young boy named Harry Stadling, his younger brother Phil, and their mother watch as a man dressed as Santa Claus comes down their chimney, eats the milk and cookies they provided for him, and leaves presents under the tree.

Thirty-three years later, an adult Harry works in a low-level position at the Jolly Dreams toy factory, where his colleagues consider him a "schmuck" and make fun of him.

He first sneaks into his brother's home and delivers toys for his nephews; then leaves a bagful of dirt at the doorstep of "bad boy" Moss Garcia.

On the street, Harry is taunted by Khaki, Charles, Peter, and Binky leaving Midnight Mass, and he brutally murders them in a fit of rage with a toy soldier and hatchet.

Later, Harry is welcomed at a neighborhood Christmas party, where people think he is just some harmless Santa impersonator; he dances and cheers everyone up and makes sure the attending children know they will have to be good boys and girls to receive their gifts.

On Christmas morning, his Santa suit disheveled and dirty, Harry returns to Jolly Dreams and activates the assembly lines, breaking all the toys, which he considers subpar.

[6] Principal photography took place in late 1979 and early 1980 in various locations in New Jersey, including Union City, New Brunswick, Edgewater, Englewood, and Montclair.

Jackson’s concerns are bigger: social responsibility, personal morality, and the gaping gulf between society’s stated aims at Christmastime—charity, hope, goodwill to all men—and the plight of those left on the outside: the children, the mentally ill, the ones who don’t fit in.

[13] Both discs use a brand new 4K master of the director's cut in widescreen, and carry over the audio commentary tracks from the previous Troma and Synapse Films releases.

Supplements such as trailers and deleted scenes between both discs remain the same, while the footage from the audition tapes are exclusive to the DVD version in the combo pack.