The arrival of Esteban Sanchez in the pueblo of Los Angeles creates quite a stir. Sanchez is known as an expert with the blade, and a man to avoid affronting. Sanchez will start a quarrel with a man for the sole purpose of fighting him and killing him. When Sanchez arrives and follows the landlord into the tavern, he strikes at a native who is not in his way and commands the man to get out of his way. After Sanchez has bathed, he visits Capitan Ortega at the presidio. Sanchez presents Ortega with papers which indicate that Ortega has been sent to Los Angeles to start a quarrel with Zorro so that Zorro can be killed. Ortega is very happy to cooperate when he hears that he and his men will share the reward money. Sanchez is being paid by the governor for his role. 'I am Zorro, but no rogue,' the masked man said.
During the following days, Sanchez makes himself obnoxious, kicking natives whenever he gets the chance. Sanchez announces his wish to fight Zorro and calls Zorro a coward. Don Diego finally decides that Zorro must make his move. Zorro sends Sanchez a message, asking him to meet with Zorro at midmorning the next day on the road to San Gabriel. Sanchez informs Ortega, who stations troops all along the road. Sanchez rides all the way to San Gabriel and back, but Zorro never appears. Back at the tavern, Sanchez is furious and calls Zorro a coward. Another message from Zorro arrives, and in it Zorro tells Sanchez that he is aware that the road was watched and that Sanchez is a coward for not wishing to meet Zorro in a fair fight. Sanchez is further angered and continues to swear and beat natives as the days pass.
Finally, Zorro makes his move. One night, Zorro approaches the tavern and looks in through a window to see Sanchez playing at cards and several men in the corner drinking. A native brings food to Sanchez and accidentally jostles Sanchez's arm. Sanchez beats the native, which angers Zorro to the point that he immediately rushes into the room. Zorro fights Sanchez and wounds Sanchez's sword arm. Zorro tells Sanchez that he will never again be able to fence with his wounded arm and that he will never be able to kill another man with a sword. Zorro retreats and escapes with the help of Bernardo. Bernardo draws the soldiers away from the pueblo by quickly riding off on his mule as soon as Zorro exits the tavern. Don Diego quickly changes back into his regular clothes and calmly enters the tavern, acting as lifeless as usual.