Anna Maria Verdugo returns to Monterey from San Francisco and becomes the object of Ricardo del Amo's affection. This friend of Diego's is an incurable practical joker. Ricardo realizes that Diego is also attracted to Anna Maria and hopes to lessen the competition by having some fun at his friend's expense.
Diego is shocked when a sorrowful Sergeant Garcia places him under arrest for being a horse thief, but when he asks the name of his accuser, he's even more surprised. Garcia's answer is "Julius Caesar", and Diego realizes Ricardo is behind the incident. He tells the sergeant and Garcia confronts Ricardo, who claims it was only a harmless prank.
This and several other pranks make Garcia think Ricardo is pulling another joke when he claims to have overheard two men plotting to steal an army payroll. Bernardo has also overheard the men and tells Diego, who realizes Zorro must ride again.
When he sees Garcia and Reyes tied up and the money gone, Zorro sets out after the robbers. He finds them and receives some unexpected help from Ricardo, who is riding nearby with Anna Maria. The two men defeat the robbers, but Ricardo discovers he has another rival when Anna Maria asks Zorro to escort her back to town.
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