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After Cueball, a recently released convict, strangles gem buyer Lester Abbott to death in his ocean liner stateroom, he steals Abbott's just purchased diamonds and flees. Police detective Dick Tracy is called to the scene and finds a calling card on Abbott leading him to Abbott's boss, gem dealer Jules Sparkle. At Sparkle's, Tracy orders secretary Mona Clyde to type a company employee list, sure that the theft was an "inside job." While Tracy waits for Mona to finish, he orders his assistant, Pat Patton, to follow another Sparkle employee, lapidary Simon Little, home. While Pat waits outside Little's house, Little meets secretly with Cueball, who demands his $10,000 cut in exchange for the diamonds. Cueball then exits Little's and knocks Pat out from behind before being spotted. Tracy, meanwhile, follows Mona to Percival Priceless' antique store and sees her slip a note under his door. After Mona leaves, Tracy discovers that Priceless is in the store and confronts him about the note, but Priceless insists that Mona is only a customer. Later, Cueball goes to the Dripping Dagger bar and asks owner Filthy Flora for refuge. Suspecting that Cueball is involved in the much-reported diamond robbery, Flora demands $500 for hiding him, and he agrees. The next day, after Tracy learns that Abbott was strangled with a leather strap, he sends his eccentric colleague, Vitamin Flintheart, to check out Priceless' store. While Vitamin poses as a snobbish antique collector, Mona comes in and confers with Priceless about meeting with Cueball at Flora's. Their suspicions about Priceless confirmed, Tracy and Pat follow him to the Dripping Dagger. Hidden in Flora's office, Cueball demands $20,000 from Priceless, then discovers that Pat and Tracy are in the bar. Panicked, Cueball strangles Priceless and flees in his car. Later Cueball returns to the Dagger and strangles Flora after she tries to steal his diamonds. Tracy, meanwhile, deduces that the leather strap used to kill Abbott and Priceless came from a certain penitentiary and learns ex-convict Cueball is the killer. Deciding to trap Cueball, Tracy has his own girl friend, Tess Trueheart, pose as a socialite and approach Mona about purchasing diamonds. Mona takes Tracy's bait and tells Cueball that she and Little can only pay him $4,100 for the diamonds because Tess knows they are stolen. Cueball accepts the deal, but then overhears Mona arranging with Tess to buy the jewels from a financially embarrassed man. Furious at the double-cross, Cueball, posing as a cab driver, takes an unsuspecting Tess to Little's. There Cueball finds a photograph of Tracy in Tess's wallet and is about to strangle her when Tracy and the police burst in and save her. Cueball escapes, however, and in his car, Tracy pursues him to a train yard. During the subsequent chase, Cueball's foot becomes caught in the tracks, and he is killed by an oncoming train. The case solved, Tracy tries to enjoy a birthday dinner with Tess and his foster son Junior, but is called to duty before he can sit down.