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In 1880, in Lincoln, New Mexico, gunfighter William Bonney, known throughout the West as "Billy the Kid," forces crooked sheriff Cass McAndrews to free his friend, Pedro Gonzales, from jail. When Billy goes back to a saloon where Pedro was thrown out because he was a Mexican, local cattle baron Dan Hickey recognizes him by his left-handed draw and hires him to "persuade" some of the local ranchers to join their herds with his. Billy goes along when Hickey's gang stampedes a herd of cattle, and during the mêlée encounters Jim Sherwood, a friend from childhood. Jim tries to convince Billy to stop gunfighting, and the next day, goes to his boss, English rancher Eric Keating, to see if he will hire Billy. Keating goes to the saloon to warn Hickey to stop his violent tactics, then privately talks to Billy. Impressed that Keating uses words rather than a gun to make a point, Billy rides back to the ranch with him. On the way they find the body of Tom Patterson, a ranch hand who was killed in the stampede. Seeing Patterson's widow's grief, Billy feels ashamed, and when he meets Keating's pretty sister Edith, he decides to tell Hickey that he is quitting. Billy and Pedro then go to work for Keating, even though Keating warns Billy that he and Jim may some day turn into enemies. Billy is happy at the ranch until some time later, Pedro is shot in the back. Billy wants revenge against Hickey's men, who he is sure murdered Pedro, but Keating begs him to wait for a few days until he returns from talking with the governor about the lawlessness in Lincoln. On the night of Edith's birthday party, just after she and Jim have told Billy about their engagement, Keating's horse returns to the ranch without him. Billy then rides out and finds Keating dead, with a bullet in his back. Later, at the ranch, Patterson's widow incites the men to go after Hickey's gang, and Billy agrees to remain with them only as long as things go the way he wants. Hickey secretly gets word that Keating's men are riding into town and sends newspaper editor Tim Ward to tell them that Keating was killed while resisting arrest. The men do not believe the story, nor does Ward, who joins them as they ride into town. Pretending that he wants to talk, but secretly sending for reinforcements, Hickey meets with Jim and suggests that everyone give up their guns. When Billy and Ward refuse, Jim asks McAndrews to lock them in jail for their own protection. While in jail, Ward is able to grab a hammer and gives it to Billy. When Edith comes to ask Billy to listen to Jim, Billy sends her away, thinking that Jim has turned against him. Later McAndrews is ordered by Hickey to shoot Billy and say that he was attempting a jailbreak. Ward's hammer helps Billy get the sheriff's gun, and thinking that McAndrews is reaching for another, Billy kills him. He then goes after the men whom Ward has identified as Keating's killers and forces each to draw on him. Jim and Hickey find Billy after he has killed the last man. As Billy is about to shoot Hickey, Jim tries to dissuade him because he might be acquitted of killing the others, but Hickey runs and Billy shoots him in the back. Billy then tells Jim that he is coming by and reaches for his gun, but because he has shifted it to his right hand, Jim outdraws him. As Billy dies, Jim realizes that his friend deliberately let him win.