Paladin returns to his hotel room from a night on the town and a man waiting in his room shoots at him. The man misses, hitting a mirror, and Paladin tackles his attacker. The two fight and after a vicious struggle, Paladin knocks out his young assailant. The man introduces himself as Roderick Jefferson and explains that he's a gambler on remittance from his family. After losing $10,000 in bets, the man he owed offered to forgive Roderick his debts if he would kill Paladin. Paladin sympathizes and explains that ten years ago, he was in a similar situation. Roderick tells Paladin to turn him over to the police, but Paladin tells him to sit down and listen.
Ten Years Ago
The young man who would become Paladin is gambling at a room in the Carlton against a man named Norge. Paladin manages to lose $15,000 to Norge, who calls in his markers. When Paladin says that he can't pay, Norge tells him that he can clear his debt by killing a man named Smoke. Smoke is a gunfighter who is protecting the people of Delta Valley. Norge owns all of the property and figures that he owns the townspeople as well. When a wounded Smoke made his way to Delta, the townspeople took him in and nursed him back to health. In return, Smoke has protected them against Norge. When Norge went there to collect what the townspeople owed him, Smoke killed his guards and ordered him to leave and stay out. Norge has checked Paladin's background and confirmed that he's an honorable man. He offers to burn his IOUs if Paladin will swear to ride to Delta Valley and challenge Smoke to a duel. Paladin refuses but Norge warns him that the alternative is jail and disgrace to his family name. After a moment, Paladin accepts Norge's deal and burns the IOUs.
When Paladin rides to Delta Valley, he stops for water and Smoke knocks him out from behind. Paladin wakes up and finds himself in an enclosure on the edge of a cliff. A wooden stockade wall blocks the only exit. When Paladin checks his gun, he discovers that it's unloaded. A black-dressed Smoke, coughing, steps out on the cliff above and Paladin challenges him to a duel. Amused, the elder gunfighter accepts Paladin's challenge but points out that it's his choice of time and weapons. He tells Paladin to wait and calls the young man a "Paladin," a traveling knight fighting for honor. Paladin insists that they should shoot it out immediately, but Smoke refuses and warns that there's no escape. He strolls off, laughing and coughing, and Paladin runs for the stockade wall. Smoke fires a warning shot, forcing his young opponent to back off.
Later, Paladin cooks supper and hears Smoke coughing in the distant. The next morning, Smoke steps back out on the cliff and tells Paladin to draw. Paladin reminds him that he unloaded his gun, and Smoke says that's the only thing saving the young man's life. Paladin draws and fumbles his revolver out of its holster. Smoke tosses him a knife and tells him to cut off as much of the flap as possible, and to soak the leather in water and let it stiffen. Paladin yells at Smoke to toss him a bullet, and Smoke tells him that he should prepare his arm and his "lance" before challenging the dragon.
Paladin follows Smoke's advice and practices his draw. The next day, Smoke returns and watches Paladin draw, and concedes that he's a quick study. Paladin once again demands that they duel, and Smoke tosses a bullet to Paladin. He balances a second bullet on a branch and invites Paladin to demonstrate his skill. Paladin shoots the bullet off despite the distance and Smoke concedes that he's ready. He tells Paladin that they'll duel the next day at daybreak.
That night, Paladin adds more wood to his fire and inadvertently puts on some green wood. He chokes on the smoke and then gets an idea.
The next morning, Smoke steps out on the cliff and tosses a single bullet to Paladin. Paladin loads his gun and then dumps more green wood on the fire beneath Smoke's position. Smoke tells Paladin to draw, but then coughs as the smoke aggravates his condition. He shoots but only hits Paladin in his left hand, while Paladin shoots true, hitting Smoke in the chest.
Smoke falls off the cliff and lands on the ground below. Paladin goes to his opponent and Smoke warns him that the real dragon, Norge, is still loose. The old gunfighter admits that protecting Delta Valley from Norge was the only decent thing he ever did, and tells Paladin that there's always a dragon loose somewhere. Smoke asks Paladin where his cause is and then dies from his injuries, and Paladin gently closes his eyes.
Later, Paladin takes Smoke's body into town and the citizens give their savior a hero's burial. Mayor Reston performs the eulogy and then wonders who will protect them now. He glares at Paladin and wonders what kind of a man would kill a hero like Smoke for money. All of the townspeople stare at Paladin and then they take Smoke's coffin to the cemetery. Paladin watches them go, Smoke's last words about his cause echoing through his head, and breaks into tears.
Upon hearing of Smoke's death, Norge rides to Delta Valley to take what he thinks is his. However, he finds a man wearing familiar-looking black garb waiting for him. Norge is surprised to discover that it's Paladin, having taken up Smoke's mantle.
Paladin and Roderick share a toast to Delta Valley, and Roderick wonders if Norge ever returned to Delta Valley. In response, Paladin says that he did... once. Paladin looks at the broken mirror and considers his reflection, and says that what a man does to correct his mistakes determines who he really is. Roderick takes his message to heart and offers Paladin the name of the man who sent him. Paladin accepts his help but tells him that he will handle the matter on his own. Roderick agrees to wait and says that he'll be spending his time polishing his own armor and lance. Paladin gives Roderick his revolver back. When Roderick points out that he wouldn't give a gun back to a man he didn't trust, Paladin agrees.