Christmas Elf
Arms
Rnd 1: Using C1 and starting in marker from st #19 on Rnd 42, PU 4 sts, 1 st per st. Slide sts to cable to set up for Magic Loop Method and heading opposite direction PU same 4 sts one rnd up. 8 sts. Be sure beg of rnd is to back of body to minimize jogs of in the round stripes. First st picked up is first st of rnd. PM to indicate beg of rnd and beg to work in rnd using Magic Loop Method:
Rnds 2-48: Knit all sts in 4 C1, 4 rnds MC stripe pattern.
Rnd 49: Switch to C2 for the hand until the end. KFB all sts (16 sts)
Rnds 50-59: Knit all sts. Place removable markers as you work:
Rnd 51: in st #8 to mark for thumb. Rnd 53: in st #9 to mark for thumb.
Rnd 60: K2tog eight times (8 sts) Stuff hand.
Cut yarn, leaving a generous tail and use Kitchener Stitch to close.

Round Christmas Monster
Rnd 60: (K1, SSK, K5, K2tog, K1) twice (18 sts). 

Pattern has been updated.