Returning to Los Angeles, El Cuchillo and his men are once again humiliated by Zorro. El Cuchillo then goes to the de la Vega hacienda and holds the family for ransom. Will he discover Don Diego's secret identity?

An old opponent of Don Diego's arrives from Spain and tries to steal the army payroll. When defeated by Zorro, he recognizes the fencing style as Diego's and sets out to reveal Zorro's true identity to Sgt. Garcia.