Two outlaws rob a stage, kill the driver and leave the shotgun guard for dead. The guard survives the attack and, with the help of a passerby, manages to make it to Diablo. The man can't defend himself from charges of robbery and murder because the bullet wound has caused complete amnesia. Annie and Lofty set out to prove the man's innocence.

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While rummaging through an old trunk, Tagg and his friend Johnny Ward, the son of a murdered lawman, find evidence that they believe proves his uncle is an ex-convict and may be part of the outlaw gang who recently robbed Diablo's bank.

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After years of fruitless prospecting, old Scissorbill Childers finally strikes it rich and decides to use his new-found wealth to open a bank to grubstake other prospectors who are searching for gold and silver. New found wealth always attracts criminals so Lofty has his hands full trying to thwart claim-jumpers and swindlers. To make matters worse, the government assayer determines that Childers' gold ore comes from the same claim as that of a murdered prospector.

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While Annie and Lofty pursue an outlaw who killed a sheriff, Tagg tries to coach his schoolteacher on the finer points of romance.