When Timmy friend Ricky returns to France he gives his dog to Timmy, Timmy however gives the dog to Cully after the death of Cully's dog. But the new dog causes Cully problems and Timmy begins to regret his decision.
As a result of Washburne showing a fire prevention film at the school, Timmy removes fire hazards from Charlie James' barn creating an unintended disturbance which causes James to petition the city to remove Washburne as chief .
When Timmy and Cully visit a abandoned cabin of a deceased man who supposedly had a hidden treasure hidden away they come across an eagle inside clutching a pouch which Timmy believes to be the hidden treasure.
When Timmy enters a Camera Club contest Timmy attach a camera to a kite to get a aerial photo, but kite and camera get caught on a high tension power wire over a neighbor stable which catches fire from the sparks.
During a time when Timmy has organized a wild animal feeding program in a severe winter for which the local farmers blame a surge in wolves, a quaint toy repairman traveling with a donkey wagon lodges with the Martins at Christmas.
It is a bustling Christmas for Calverton as Timmy sings a solo at church and the Martins host a party while Lassie rescues the cubs of a wolf Krebbs has killed and Nicholson disappears with the cubs as mysteriously as he arrived.
To help with the Martin's financial bind, Timmy hitches a ride to a distant town to enter canine field trials to win the prize money for which he must put up Lassie for the unexpectedly high entrance fee.