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Matt ("Andrew Clarke") is feeling lonely because of Kathleen's decision to join Michael in Ireland for an extended visit. Meanwhile, Paterson's Ridge is preparing for the annual 'Man From Snowy River' horse race, and Matt succumbs to pressure from people who suggest he's a bit long in the tooth, and enters the competition. His decision was also due in part to defending the McGregor family honour, when he learns that Josh ("Daniel Daperis") is being bullied by boys, who are teasing him because no McGregors had entered the current race up until that point. Duncan Jones ("Hugh Jackman"), an old school friend of Rob's, arrives for a visit while his ship is in dry dock for repairs, and instantly catches the eye of all the local ladies. He's invited to stay at Langara, where he tells the family about his life in the merchant marines, but doesn't paint a very exciting picture of his experiences, declaring that it was quite boring, and causing Danni ("Kristie Raymond") to suspect that he is hiding something about his time at sea.

Montana ("Gabrielle Fitzpatrick"), (now suddenly and inexplicably a redhead), also enters the competition and is subjected to sexist taunts from a couple of knuckle-dragging fellow contestants. Duncan politely defends her honour, but walks away when things look like they might turn into a fist fight, and is consequently branded a coward by the loudmouths.

Matt struggles to get in shape for the race, and keeps his involvement in the event secret from Danni, but she finds out, and reluctantly decides to back him.

Once it becomes known that Matt intends running in the race, someone poisons Matt's fastest horse. The long odds against Matt winning cause the finger of blame for this obvious act of sabotage to point squarely at Barnaby Evans ("Kier Saltmarsh"), the bookie, who stands to lose a lot of money in the event that Matt wins. Undaunted by the loss of his steed, Matt takes a risk on riding a half-broken brummbie (wild horse).

Once the race begins, it's clear that some of the more unscrupulous entrants will stop at nothing to win, and foul play abounds, but despite the odds, Matt streams ahead to cross the finishing line first, with Montana a close second. Ultimately the whole town wins when Evans is forced to pay out on all the bets placed on the original Man from Snowy River.

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