Pedro Avila, recently arrived in the pueblo, earns a meager living by betting other men that he can beat them in a sword fight. He tries to talk Diego into betting, but Diego refuse, as Diego knows he must keep his skill a secret. This gives Avila and his friend Tony Pineda an idea about how to get rich. They plan to force Diego into a duel, then allow the frightened man to buy his way out of the situation.
They begin their plan by mistreating Don Alejandro, and Diego comes to his father's assistance. Avila promptly challenges him to a duel as planned. Afraid that his friend will be killed, Sergeant Garcia kidnaps Diego and leaves him tied up in a deserted shed. As a result, Diego is unable to defend the family's honor and Don Alejandro decides to take his place.
Garcia is aghast at this turn of events, for he knows that Don Alejandro cannot hope to defeat the much younger man. He rushes back to the shed, frees Diego and tells him of his father's determination to best Avila. Diego switches to his Zorro garb and rides to the field of honor, where Avila has begun to win the contest. The mismatched duel ends when Zorro defeats Avila and warns him never to return.