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In chapter two of The Phantom of the West, Jim Lester (Tom Tyler) and Mona Cortez (Dorothy Gulliver), who miraculously survived the fall into the ravine, are saved a second time when Jim's horse Pal shields them from the stampede of wild mustangs. Back in Rawdon, Lafe Johnson (W. J. Holmes), one of the seven men accused by Francisco Cortez (Frank Lanning) of knowing the identity of the mystery killer, decides to get out on the milk train but is stopped by a bullet from the Phantom. The masked menace grabs Mona at the hotel and in the ensuing struggle Jim is pushed down the stairwell into a blazing fire. This chapter was filmed, rather oddly for a Western, at Universal's "European Village," a standing set known from such legendary Grand Guignol dramas as The Hunchback of Notre Dame and Frankenstein. Quite a fitting place, in fact, for Joe Bonomo's spectacular return from the grave. Bonomo, whose nameless outlaw was killed in chapter one, suddenly turns up as another character in chapter two, complete with the identical wardrobe!