It is a midquel that takes place within the timeline of the original Beauty and the Beast (after the fight with the wolves, before the Beast gives Belle the château library, and before the fight with Gaston).
In this movie the Beast forbids Christmas (because his transformation from the Prince occurred on Christmas) until Belle, Cogsworth, Lumiere, Mrs. Potts, and Chip convince him that Christmas is a good holiday.
The film also shows the time that the enchantress put the spell on the château in the first film in plus detail.