Sanctuaire, who was hammered by Henderson's Sprinter Sacre in the Tingle Creek Chase, combined his eccentricities and undoubted ability in the williamhill.com Desert Orchid Chase.
The 11/8 favourite appeared to be grinding to a halt when overtaken by Wishfull Thinking turning into the home straight, but suddenly came to life again and eventually powered 13 lengths away. Nicholls said: "He started to pull himself up on the back straight, Ruby (Walsh) had dropped his stick and I thought that was it, but when the others had gone past him he took off.
"If we can ride him with more restraint he could be interesting.
"We are going to have to take on Sprinter Sacre at Cheltenham, so I probably won't take him to Ascot first, we could maybe go to the Game Spirit, Cheltenham and then Sandown at the end of the season."
Nicholls already has the Triumph Hurdle favourite in Far West but French recruit Irish Saint (10/11 favourite) threw himself into the mix after the William Hill - iPad App Now Available Juvenile Hurdle. Viewed as a future chaser, he will take in a bigger race at the end of January.
Menorah came to the rescue for the team which had seen the King George VI Chase cruelly snatched from their grasp just 24 hours earlier.
Captain Chris had been within a whisker of rewarding jockey Richard Johnson, trainer Philip Hobbs and owners Graham and Diana Whateley, only for Henderson's Long Run to stick his neck back in front.
The restaged William Hill Levy Board Peterborough Chase proved an ideal setting for Menorah (7/2), who defeated Hunt Ball by three-and-a-half lengths. Graham Whateley said: "I never like to make any plans - the most important thing is to get him back home and see how he is."
Henderson's Simonsig (1/6 favourite) followed in the hoofprints of Sprinter Sacre when registering a convincing victory in the williamhill.com Novices' Chase, just six days after his fencing debut at Ascot.
Henderson said: "I wanted to get the practice in and he will probably have one more run at the end of January. Sprinter Sacre ran in the Game Spirit and I wouldn't rule that out (for Simonsig)."
Tweedledrum (16/1) provided Tom Symonds and Ben Poste with a second high-profile victory in the William Hill - New iPad App Mares' Handicap Hurdle, while Jason Maguire snatched the last two races with Mister Hyde (4/1) in the William Hill - No 1 Downloaded Betting App Handicap Chase and Bourne (9/1) in the Download The William Hill App Handicap Hurdle.
Nicholls, meanwhile, has no excuses for Kauto Stone's disappointing run in the King George VI Chase at Kempton.
Having won a Grade One at Down Royal previously, hopes were high he could emulate his half-brother Kauto Star by taking the Christmas highlight, but he was pulled up before the third-last.
Nicholls believes his size prevents him from thriving in deep ground and will wait before making a plan.
"I was disappointed with him, but I haven't got any excuses," said the champion trainer. "Because he's small, it could be that he just struggles to jump out of that very testing ground.
"It's back to the drawing board."