Matt is out of town when Morell arrives looking to revenge the hanging of his bushranger son, that Matt helped to capture. The Morell's close off the town and cut the telegraph wires before challenging Colin or Rob to a duel. Rob sends Colin to accept the duel but instead Colin confronts Morell wearing a pistol. Matt is on his way back to town when he finds Emily's overturned buggy and sets out to find her, unaware that she is being held hostage by a woman in the woods.
Matt goes out of town for a couple of days on business, leaving Rob ("Guy Pearce") in charge of Langara.
When Emily ("Sheryl Munks") goes to visit some neighbours, involving a lengthy horse and buggy trip, Colin, ("Brett Climo") is concerned for her welfare, but Jessie ("Josephine Byrnes") assures him that his expectant wife will be fine. However, unknown to her, a ruthless gang of criminals is on the road to Paterson's Ridge, with malevolent intent.
An old friend of Colin's, Jim Taylor ("Paul Gleeson"), checks into the Railway Hotel with his wife Ellie ("Rebecca Macauley") and they tell an enthralled Josh ("Daniel Daperis") that Jim, a prize-winning hand gun shooter, is on his way to take part in several major shooting competitions with the aim of using the winnings to set themselves up financially for life.
The unsavoury looking gang gallop into town and their leader Burt Morell ("Chris Haywood") checks into the hotel, telling a curious Jessie that he has business with Matt ("Andrew Clarke"). This turns out to be revenge, as Morell holds Matt responsible for the death of one of his sons, who had been hanged after Matt helped apprehend him for his part in a murder. He tells Colin that he intends meting out justice of his own: a son for a son, and issues a challenge to either Colin or Rob to meet him face to face in a duel to the death. To ensure that the troopers aren't sent for, Morell and his gang which is made up of his surviving sons, have cut the town's telegraph lines.
Meanwhile there's more trouble as the wheel comes off Emily's buggy and she is thrown down a ravine. She walks through the bush until she finds a small cabin, but its occupant, an apparently mentally unbalanced young woman ("Lisa Callaghan"), does not provide the help she is looking for. Instead Emily is held at gunpoint and told that she can never leave. The girl tells Emily her name is Nancy, and that she is on the run from an institution where she had been mistreated, having been placed there by her no good mother.
Danni ("Kristie Raymond") rides into town to find that everyone is hiding behind closed doors. She is shocked to discover that her family is at the heart of the trouble.
Meanwhile Colin and Jim Taylor go out looking for Emily and Rob, aiming to keep the latter out of Paterson's Ridge, so that he won't get involved in the conflict. When they split up, Colin is caught at Morell's blockade and sent back into town. Jim Taylor later finds Rob injured in the woods, having been kicked in the head by a wild horse he'd been trying to catch and bring to Langara. Jim takes him to the hotel, where he recovers enough to tell Morell's gang that neither he nor Colin have any intention of taking part in the gun fight. The outlaws respond by threatening to burn the whole town to the ground. Herbert Elliot ("Greg Parker") rides out to look for the troopers.
When Jessie refuses to serve Morell and he threatens her and Ellie Taylor, Jim Taylor steps in and hits the bandit. Morell demands to meet him in a gun fight, which Jim readily agrees to do, believing that his skills as a sharp shooter will give him the upper hand. Jim out-draws Morell, but refuses to pull the trigger. However, Morell has no such scruples and shoots Jim in the shoulder, effectively ending his shooting career, for which Ellie blames the McGregors.
Once Nancy finds out that Emily is the daughter of Jessie McCluskey, she changes her tune and becomes more friendly, apparently holding Jessie in high regard, but she does not reverse her decision to keep Emily a prisoner.
Herbert arrives back in town, having been caught and beaten by the Morells before he could fetch help from the troopers.
Matt meanwhile, oblivious to the goings-on in town finds Emily's damaged buggy at the side of the road and begins searching for his daughter-in-law.
Rob announces his intention to meet Morell in the duel, but Jessie exposes the fact that his head injury has left him with badly blurred vision, and that to take on Morell would be nothing less than suicide. However, the next day Rob proclaims that his sight is better and insists on being the one to take part in the duel, as Colin has a family. Reluctantly, Colin agrees and says he will go and inform Morell. However, even as Jim Taylor lends Rob one of his guns and coaches the younger McGregor son in fast draw technique, Colin meets with Morell, a gun holster strapped to his side, and tells the crook that he will be meeting him in the fight, not Rob.