The song is about performing oral sex on a female, with "Christmas Tree" being used as a metaphor for vagina: "the only place you'll wanna be is underneath my Christmas Tree" / "my Christmas Tree's delicious"
The back-and-forth of a female and a male voice reiterate the idea of being "partners", with the female being "on top".
"Let's fa-la-la-la-la, la-la-la-la" is supposed to imply "let's fuck", the "ho ho ho"s could also actually be "hoe, hoe, hoe", and "Christmas cheer" could mean "my legs" in the lyric "I'm spreading [Christmas cheer]".
