The Southwestern Pacific Railroad is plagued by a mystery train, which on dark nights, seems to be headed on a collision course with train number 101 and then disappears after the 101 derails. Harrington, head of the railroad, holds an inquiry and discovers that while engineer Smoky Nolan and his stoker saw a train headlight the night of the accident, the signaller swears no train passed his way. After meeting Carolyn, Nolan's beautiful daughter, Harrington's playboy son Bruce finally decides to work for his father, who assigns him to investigate the crashes. With the help of his friend, Dick, who poses as Bruce while Bruce poses as his friend, Smith, Dick goes to the other end of the train division and gets a regular job working for the train, and boards with the Nolans. The railroad's stock drops due to the crashes, and a syndicate headed by Reynolds offers to buy the railroad. Harrington agrees to respond by midnight Thursday. In the meantime, Smoky is dismissed on his birthday by the inquiry board. The syndicate, which is actually responsible for the "phantom express," is aware that Bruce is investigating them and kidnaps Dick and Carolyn. Bruce accidentally finds the note ordering his own kidnapping and, with Nolan's son Jack and the stoker, follows the thugs to their hideout. There, they discover that the "phantom train" is actually an airplane equipped with a headlight and sound system that reproduces the sound of a train. The thugs are brought to justice, and Dick and Anne are rescued. On their return to the train yards, however, a storm destroys the telegraph and it is believed a train cannot get through. Bruce is desperate to reach his father before he sells the railroad, so Smoky and the stoker take a train and push it through, despite flooding, landslides and other hazards. Bruce gets to his father in time and reveals the syndicate to be corrupt. Later, Smoky and his stoker have returned to their posts, and Carolyn and Bruce honeymoon on the train.