While on the trail, cowboys "Tex" Williams and "Smokey" Rogers see a rider shoot and kill cowboy Buck Landers, and are informed by his ranch hand, Ann Bates, that Buck's herd belongs to a group of small Texas ranchers and is on its way to Frank Madison's packing plant in Anselmo, Texas. When two other ranch hands, Gorman and "Deuce" Spriggins, approach, Deuce immediately recognizes his old friends Tex and Smokey and suggests they join the crew to help protect the herd from the rustlers who killed Buck. Later, Ann and Tex visit Madison's office in nearby Mason City to inform the plant owner of the risk of continuing the cattle drive. Before they arrive, however, banker Reid Lewis, who has been rustling the herds in order to bankrupt the plant, offers Madison a loan using the failing plant as collateral. Just then, Tex and Ann arrive and convince Madison to accept delivery of the herd in Mason City, and Madison informs Lewis that money will arrive on the next day's stage with which he can hire guards to accompany the herd to Anselmo. The next day, after Smokey posts wanted signs for "The Pecos Kid" bearing Tex's picture, Tex sees the stage being robbed by Lewis' henchmen, Dave Roberts and Steve Craig, and steals the loot from them. He then pretends to be thrown from his horse, and when the bandits find him, he gains their trust by lying that he is The Pecos Kid, but is posing as "Tex Williams," trail boss for the Texas herd. Later, Tex warns Madison that Lewis is behind the scam, and they plan to trap the outlaws while taking the herd to Anselmo. Now in Roberts' confidence, Tex gains entry into the gang's hideout and learns about their plan to rustle the herd. As he and Smokey set dynamite to blast the gang on the trail, Ann accidentally reveals to Lewis that Tex is only pretending to be an outlaw. Lewis races to the range to warn Roberts of Tex's ruse, but Smokey lights the dynamite, signaling the neighboring cattle ranchers to help them, and the gang is quickly subdued. As Tex, Smokey and Deuce leave town the next day, Ann and Madison proclaim their eternal appreciation.
In the 1880s, eccentric Judge Smokey Rogers prepares for a New Year's Eve celebration by talking to imaginary people and sending for equipment to man his imaginary gold mine in the ghost town of Stillwell. Cowboy Brady informs his henchmen, Bart and Spike, of his plan to spread the rumor of Smokey's "mine" to make Stillwell a boomtown, ripe for exploitation. Brady wants to buy the town, and to this end has been systematically stealing and destroying letters which inform absentee town owner John Gorman that Stillwell will be sold at auction the next day unless he pays his taxes. Soon after, cowboys Tex Williams and Deuce Spriggins arrive in town with their herd, followed by Gorman's niece Ruth, who informs Tex, Deuce, Smokey and Brady that her uncle has died and left Stillwell to her. Brady then schemes with Bart to kill Ruth as soon as the cowboys leave town. At midnight, Brady stampedes the herd, but as soon as they recover their cattle, Tex and Deuce return to Stillwell, suspicious. Just outside of town, Smokey stops them and reveals that he and John were partners and ever since they found a gold mine under the town, he has been pretending to be insane in order to throw off Brady and his men. After they deduce Brady's plan, Tex rides to the tax office while Deuce and Smokey stay behind to protect Ruth. Brady sees Tex ride off and has Bart follow him to the county seat, but there, Tex convinces the marshal to arrest Bart and send a posse to Stillwell. Back in town, Spike informs Brady what the marshal has done, and the two plan to trap Tex when he returns. Tex, however, finds Ruth, Deuce and Smokey outside of town and presents the receipt for the town to Ruth, and they all ride for Stillwell. A gunfight ensues, and when the marshal's posse arrives, they easily capture the gang. Before Tex and Deuce leave to finish their ride, Tex announces his plan to marry Ruth when they return.
