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Red Ryder (Donald Barry) manages to escape the blazing water tower, but the Circle R's troubles are just beginning. With the water supply poisoned by crooked lawyer Calvin Drake (Harry Worth) and his co-conspirator Ace Hanlon (Noah Beery), the Duchess (Maude Pierce Allen), Red's aunt, may not be able to meet her mortgage payments. It is thus decided to lead the Circle R herd through Sundown Pass to the Wilson Ranch for fresh water. Hanlon is on to the scheme and sends his lackey One-Eye (Bob Kortman) to create an avalanche at the pass. On her way to discuss the water situation with Wilson, Beth Andrews (Vivian Austin) is knocked unconscious by a tree branch right in the path of One-Eye's explosion. Red Ryder happens upon the scene just as the mountain comes crashing down.