Although we didn't have Target when I was a kid, that concept is what did it for me - obviously Santa's elves couldn't make the exact same gift basket I wanted at the store. If your DS is figuring out that "Santa" goes to Target and there's really just an ocean under the North Pole, I say it's time! I remember being quite proud of myself for figuring it out. And the magic of Christmas was still there, even though I no longer believed. My DS6 quizzed me about the tooth fairy (I can tell he knows deep down it's not true), but as I quizzed him back, it became obvious that he DIDN'T want to know the truth. So I didn't tell him. It sounds like your DS really wants to know the truth; he can still have magical Christmases even without Santa.
