For starters, there are no plums involved.

The Sugarplum Fairy, the visions of sugarplums dancing in one's head: Christmas is definitely this confection's time to shine...whatever it is. I always imagined it (probably because of the fairy) being something sort of sparkly, like a Christmas ornament, and definitely beautiful. But just as a first real-life Turkish Delight may have left you wondering why such a sticky morsel gave the White Witch any leverage, the real-life sugar-plum isn't as glamorous as childhood imaginings would have it.

Says the Atlantic, who took up the question,

The Oxford English Dictionary declares the term obsolete, and so it is. "Sugar plum" was well known to English-speakers from the 17th to the 19th century as another name for what was sometimes called dragee or more commonly comfit...All of these terms name a sweet made of sugar hardened around a central seed or kernel in successive layers using a process called "panning."

Essentially, it could be any vaguely round or ovoid hard candy โ€” or even candy, generally. And nowadays, it's the name of all kinds of fruit-filled, round Holiday cookies, too. So "The Night Before Christmas" might just be a dentist's nightmare โ€” or, more optimistically, left open to interpretation. Suggests the Atlantic, a sugar plum could be "the universal signifier everything sweet and delectable and lovely." In other words, sweet dreams.

Sugar Plums: They're Not What You Think They Are [Atlantic]

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