Sugarfoot joins a group of horse-hunters in the foothills of New Mexico. He captures a prime black stallion, but the leader of the horse-hunters claims the horse for himself. A member of the gang steals the horse for Sugarfoot, but sells him in Sante Fe for $250, pocketing $100 and giving Sugarfoot the rest. Sugarfoot apprentices himself to the stallion's new owner for a year to gain ownership of the horse. He breaks the horse, called Diablo, to saddle and the ranch owner enters the pair in a big Fourth of July race.; Dave Slawson runs the town of Higgin's Creek, forcing a scared town council to pass ordinances that benefit only him. Sugarfoot goes through the town's ordinances to find out-dated ones that he can use against Slawson.