In the 1880s, Steve Reynolds is employed as a government agent to help tame the remnants of the once-vast herds of wild mustangs in the West for use by the Army. In Arizona, Steve leases 15,000 acres of the finest grazing land to Bronc Masters to raise horses for the Army, but later learns that Bronc has died from being thrown by a horse. Suspecting foul play, Steve begins to investigate. Grat Hanlon, who has tried to get Bronc off the land, sends his colleague Bunco to follow Steve so that he will not interfere with their men as they run off the horses. At Bronc's ranch, The Durango Kid, a masked man on a white horse, sees four men, including Grat and Bunco, firing guns to herd horses. He climbs a tree and jumps the rear two men. After a gun battle, Grat and Bunco ride off. At a town meeting to award the contract for delivering horses to the Army, Grat claims he can supply 300 head a month, an amount no other rancher can match. He admits he plans to use Bronc's herd, contending they will become the property of the first man who can round them up, but Steve introduces the herd's new owner, an Indian boy named Johnny, whose father saved Bronc's life. After Johnny's parents died in a smallpox epidemic that killed many Indians, Bronc legally adopted Johnny. Steve vows to deliver the 300 head per month with Johnny. Grat, who hates Indians, sends a henchman to Johnny's hotel room, but the boy escapes, falling out the window. Laid up with a broken leg, Johnny gives Steve's sidekick, Smiley Burnette, a message to take to Chief Running Wolf to have him start rounding up the horses. Grat overhears the message and sends his henchmen to stop Smiley from reaching Indian country. After one of the henchmen shoots at Smiley, The Durango Kid shoots one of the pursuers, then sends the other off to hobble home without his boots. Although Smiley inadvertently burns up the message while sending smoke signals, he is able to relay it verbally to the Indians. Grat next comes up with a plan to delay the transaction between the Army and Johnny by having his men rob the bank where Capt. Barham keeps $15,000 of government money, which he plans to use for the deal. When the bank is robbed by four masked men, The Durango Kid follows them, and when they split in pairs, he pursues the two with the money bags and recovers them. Grat, meanwhile, threatens to arrange a new deal with an officer who outranks the captain, Col. W. S. Fawcett at nearby Fort Starr. When The Durango Kid returns the money, Grat calls for Bunco, and The Kid hits him. As The Kid rides off, Grat begins a gunfight, but The Kid shoots the gun from his hand. Grat then receives a telegram from Fawcett, who says he will listen to his proposition the next day. As Grat prepares to leave for the fort, he instructs Bunco to get a henchman to finish Steve off. Steve knocks out the henchman, then sends Smiley to find wranglers to help get the horses to town. The Durango Kid then meets with Chief Red Wing and his Indians, and explains that bad white men will steal from Johnny if the horses are not at Cyclone Canyon soon. The Indians send a smoke signal to another tribe for help. The next day, Grat returns with the colonel's signature on a new contract that will take effect at six if the horses are not delivered. When Bunco tells Grat that the Indians have rounded up more than 300 horses and delivered them to wranglers working for Steve and Johnny, Grat orders him to get his men together to stop them. They plan to capture the horses at Little Neck Canyon, which the horses have to pass through. As six o'clock approaches, The Kid and his followers chase off Grat's gang in a gun battle. In town, The Kid finds Grat at his safe and shoots a gun from his hand, then bests him in a fistfight. At five minutes before six, the horses, led by Smiley, run through the town's main street and are put into corrals. Later, Steve tells the captain, Johnny and Smiley that Grat has confessed to Bronc's murder. Johnny tells Steve to thank his friend, The Durango Kid.