Blind Pete Horne knows the location of the Lost Spanish Silver Lode, but is knifed before he can tell anyone. His seeing eye dog, Duke, brings Rex Allen and Gabriel Horne to Pete's lifeless body. They set out to find the killer and run into trouble near Silver City, Arizona, when they rescue Katie McIntosh from a gang that is chasing her buckboard. She asks Rex and Gabriel to stay and help her on her ranch. Following an attempt to drive off her cattle, Rex finds a clue to the strange secret behind Pete's murder - a tiny brass fitting which Rex discovers is part of a Navy diver's equipment. Tying this up with stories he has heard about "the ghost in armor" who rises from the lake on Katie's ranch at night, Rex comes to the conclusion that the lost lode is under the lake. Pete, who had been a Navy diver in the war, had recognized the sound of a pump as the crooks, led by Monk Monroe, dived to search for the mine entrance.