Billy walks out of the rain into a Southwest Texas bar. The only other patron in the bar is Pat Garrett, who is riding with Jesse Evans and the 7 Rivers Gang. He recognizes Billy from his wanted poster. He convinces Billy to ride out to the gang's hideout and visit with Jesse. Jesse tells Billy that Barbara got a job as a schoolteacher. Billy accepts Jesse's offer to ride with the gang as they rustle John Chisum's cattle. Jesse sells the cattle the gang rustled at an Army post. Jesse brings back a wagon full of women and liquor for his men. A drunk Billy brawls with Bob Olinger, who has been harassing him, and beats him. Pat tells Billy that his wife Juanita and their baby died during childbirth. Pat cautions Billy about his growing notoriety. The gang falls into a trap when they go back for more of Chisum's cattle, as a gunfight erupts in the middle of a stampede. A newspaper article about the shootout cites Billy by name. Jesse decides it's time for the gang to move on. Frank Baker drops by the gang's hideout with a proposition. Lawrence Murphy, a businessman in Lincoln County, wants to hire an army of gunmen to protect his interests against criminal elements. A Mexican boy comes by to tell Billy that Segura is in jail in Chihuahua convicted of Ortiz's murder. Billy plans to rescue Segura then meet the gang in Lincoln County. Pat gives Billy the nickname Billy the Kid. Billy surprises the jail guard, who unsuccessfully tries to lead him into an ambush. Billy shoots a third guard multiple times on the way out. Billy and Segura leave the house of Segura's friend Jesus before the posse arrives but Jesus is gunned down.