How bad is it? Well, for one thing, there's only one elf. It's pretty bad.
Should you see it? Yes. It has more than enough cheap laughs to be watchable.
Nazis need to breed elves to a virgin descended from the Master race at midnight on Christmas Eve in order to recreate an army of supermen. The requisite girl lives with her incestuous wheelchair-bound Nazi grandfather/father, an abusive mother and a brother who watches her in the shower. The girl's friend accidentally, doing witchcraft in the woods, brings forth an elf by bleeding on the ground. These two girls, plus another, get locked in a department store after hours - there's also a guy, who just disappears into the parking lot early on and gets forgotten - and can only be saved by the replacement department store Santa, played by Dan Haggerty, whose chain-smoking is less offensive than the previous Santa's cocaine-fueled perversions (which get him castrated early in the film).