Victoria rushes to meet the stage that carries her brother, Lieutenant Francisco Escalante, to town. They have a joyful reunion. He then introduces her to the lady who had traveled with him from Mexico City. Senora Deranoso asks how to get to the de la Vega house. Victoria gives her directions and she limps away.
As Senora Deranoso approaches the house, Don Diego is teaching geometry to Felipe, who would rather doodle "Z's" on the page. When they decide to take a break, they are surprised to find her at the front door. She calls Felipe "Jose". When Don Diego corrects her, she tells them that his name is actually Jose Deranoso and she is his mother.
Once they are all inside, Diego reminisces about how he found Felipe. He was returning from a funeral and came across a battle of the August Revolution. The government troops defeated the rebels. Felipe's parents were running away with him in a cart when an explosion knocked the cart and his parents over. Felipe crawled out and tried to wake his mother, but she didn't move. When he tried to call her name, he realized that he couldn't speak.
Senora Deranoso tells Felipe that his father had died, but she had only been wounded when the cart landed on her leg. She had been rescued two days later, but by then Felipe was gone.
Don Diego tells her how he had found Felipe and searched for his family, but was unable to find anyone who could take him in. He had brought him home instead. Felipe doesn't remember most of what had happened. Don Diego says that although Felipe is like a son to him, he is not his father so it is up to Felipe whether to stay or to go with her. Either way, he will still be in Diego's heart. When asked whether Senora Deranoso is his mother, Felipe hesitates, then mouths the word "Mother" and takes her hand.
Back at the tavern, Francisco offers Sergeant Mendoza something to drink. He informs him that he intends to become one of the garrison's officers. Victoria stops Sergeant Mendoza from getting drunk by reminding him that he has target practice later. When she scolds her brother for encouraging Sergeant Mendoza, he admits that he was testing him and the quality of the people protecting the garrison. He is concerned that they will not be prepared when the Americans decide to take over. When Victoria doubts that this will happen, he tells her that she doesn't have a head for politics. He leaves to meet with the Alcalde.
Don Diego, Felipe and Senora Deranoso come to the tavern so that Felipe can say goodbye to Victoria. He is leaving for Mexico City with his mother.
The Alcalde reviews Francisco's experience and letters of recommendation. He then offers Francisco a chance to join their ranks in exchange for capturing Zorro. He agrees.
Outside, Don Diego helps Senora Deranoso into a wagon and then turns to Felipe, who hands him a letter. Diego says, "One last time and then you are Jose forever." and gives him a hug. He says goodbye and Felipe climbs onto the wagon. He looks back as Senora Deranoso drives them away. Francisco walks up to Victoria and Don Diego as they watch the wagon drive away. He looks surprised and says that Felipe had an amazing resemblance to his friend's son. He and Victoria walk away while Don Diego read's Felipe's note. It says, "You gave me a home when I had none. Love when I thought I was lost. I shall never forget you. Give my regard to… Z."
While Felipe and Senora Deranoso travel in the wagon, he gestures that he would like a drink. She says, "You will have to wait, my boy." and he smiles at her.
Later, a man is filling a canteen at a stream. He smiles as Felipe and Senora Deranoso's wagon approaches and stops near him. He asks her how it went, and she gruffly tells him to tie Felipe's hands because he is worth his weight in gold. They grab Felipe and she says, "Imagine me, a mother!"
Back at the tavern, Sergeant Mendoza and Victoria discuss how depressed Don Diego is now that Felipe is gone. While talking about Diego and Felipe's relationship, Victoria tells Sergeant Mendoza that she doesn't believe that Senora Deranoso is Felipe's mother. She can't explain why. Francisco comes downstairs and tells them that he will soon be Sergeant Mendoza's superior officer once he captures Zorro. Victoria tells him that Zorro is a friend of the people, but he doesn't believe her since Zorro is the enemy of the government.
At the de la Vega house, Don Diego is playing piano when Victoria interrupts to tell him that Felipe is in danger. She tells him that according to Francisco, Felipe looks identical to the son of a banker. She encourages Don Diego to start searching for him. Diego promises to try, but sounds doubtful that he'll be able to find him. She tells him that she wishes that Zorro knew about this. When she leaves, he rushes to change into Zorro.
Soon Zorro is tracking the wagon's trail. At their hideout, the woman and man have Felipe tied up. Zorro bursts in, defeats the man, and rescues Felipe. He tells them that he knows that they planned to use Felipe to rob a bank. The woman admits that when passing through town months ago she had realized that Felipe looked identical to the bank president's son. They were going to use him to get into the bank. When they ask Zorro what he will do with them, he says that it will be up to the Alcalde.
A smiling Felipe drives the wagon into town with the woman and man tied up in the back. When a surprised Sergeant Mendoza questions him about what is going on, he points to a note tied to the man's back. Sergeant Mendoza reads it and laughs.
Zorro visits Victoria to compliment her on how observant she was to recognize that the woman was not Felipe's mother. Francisco bursts in on them and threatens Zorro with a gun. Victoria tries to stop him, but he doesn't listen. Zorro grabs the gun and throws it away, but Francisco pulls out a sword. Victoria tries to grab him, but he pushes her away. Zorro tells him that for his sister's sake he will not kill him, but he will teach him some manners. They duel with their swords through the tavern and out into the street. The Alcalde and the troops rush to see the fight and he tells them to shoot at Zorro. Sergeant Mendoza protests that Victoria's brother is too close, but the Alcalde tells them to get ready to fire anyway. Victoria jumps between the guns and both Zorro and Francisco. When she won't move, Francisco realizes that he has made a mistake, apologizes to Zorro and helps him escape. They lock the soldiers and the Alcalde in the garrison. He then apologizes to Victoria for not listening to her. She tells him that he must leave Los Angeles because the Alcalde will not forget what he has done. Zorro tells Victoria that she was very brave, but he cannot say what is in his heart until the day comes when he can remove the mask forever. He then rides away.