Davy Baylor works as a shipping clerk in a department store in New York. Around quitting time one night, the mentally retarded clerk witnesses one of his coworkers, a saleswoman named Cheryl Jensen, being slain in the alley next to the store. Davy goes to help her out, but is surrounded by the police. He saw the murderer, but since he was the only witness to the crime and is there when the police arrive, he becomes the prime suspect.
Looking for help, Davy roams the streets until 5:00 AM when he places a desperate call to McCall. McCall, despite being unamused with Davy's early phone call, agrees to help him and takes him to the police station to file a report. Despite McCall's intentions, the police arrest and book Davy on murder charges. At his arraignment, Davy escapes and goes to hide in his "tree house", which is the empty water tower on the roof of an abandoned building. McCall, who now has to convince Davy that he really is on his side because the young man doesn't trust him anymore (McCall had told him that he wouldn't be arrested), warns Davy that people will now know of his secret hideout and that he needs to come with him so he can be safe. Although Davy's mother wants him to come home to her, McCall advises against it because he believes that is the first place the police will look.
After consulting with Jimmy, who procures a safe house for Davy, McCall asks his friend to keep an eye on Davy. He later takes Davy back to the scene of the crime to jog his memory. Davy recalls that the killer was wearing tan pants with a stripe down the side and tan work boots- part of the uniform of the shipping clerks at the department store. Investigating further, McCall's instincts are trained on Will Ratigan, a friend of Davy's who also worked in the shipping department. He quickly finds out that Ratigan has a criminal record and had been having an affair with Cheryl Jensen while her husband was away on business. Will also is a violent felon, having been arrested and imprisoned before.
Meanwhile, against his better judgment, McCall allows Mrs. Baylor to see her son in his safe house. What he doesn't know is that Mrs. Baylor is looking for an opening so she can whisk her son away and run to a safe place. She makes the opening while asking Jimmy to go fill a prescription for Davy. While Jimmy is at the pharmacy, and despite Davy's objections, Mrs. Baylor puts her son in a cab headed for one of the airports. Jimmy just barely misses them and notifies McCall.
Will Ratigan, in the meantime, has a discussion with his father over what happened. Will is still trying to convince himself and his father that Davy is the guilty party, calling him a "psycho murderer". However, his father is disgusted by his conduct and tells him that he's "through making excuses" for his son, saying that he should've just left Will and his mother because Will obviously learned from the years of abuse his father put his mother through. He's also surprised that Will would throw Davy under the bus as he did, as he considered him a friend at one point. Will leaves in a huff and his father goes into his closet, finding a pair of blood-spattered work boots on the closet floor.
Davy and his mother arrive at the airport, where Mrs. Baylor buys two one-way tickets to Quebec City. Davy does not want to go to Canada, throws a tantrum in the airport, and runs away again. After having a conversation with Mr. Ratigan over whether or not he should turn his son in where Will's boots are shown to him, McCall intercepts Jimmy at the airport and realizes where Davy must be going. He also realizes that Will Ratigan is on his way there and heads over there himself. Mrs. Baylor profusely apologizes to McCall, who says that he is not the one she should be apologizing to.
McCall arrives at Davy's hideout just in time to catch Will, who is aiming to kill Davy. During a scuffle McCall is thrown over a railing, which causes him to fall down a flight of stairs and severely injure his leg. He is able to prop himself up and shout instructions to Davy, who is busy dodging bullets from his co-worker. Davy falls through a glass skylight into an abandoned workshop, where McCall has made his way to despite his intense pain. With McCall continuing to guide him, he grabs a block of wood and is able to incapacitate Ratigan. McCall then shoots the shipping clerk in the shoulder, giving him a flesh wound.
Just as McCall shoots Ratigan, the police arrive. Davy, thinking they're there to apprehend him, grabs Will's gun and points it at the police. McCall, realizing that everyone's lives are in danger, is able to cajole Davy into putting the gun down. Once he realizes that the cops are not there to take him back to jail, the frightened young man calms down and gets up while the cops apprehend Ratigan for murder. As a token of his gratitude, Davy invites Jimmy, McCall, and his mother over for cheeseburgers and then leaves, telling his mom he can find his own way home.