A gang is opposed to statehood for Texas, and smuggling everything they can across the border to keep statehood from happening. Sunset Carson and his pal, Frog Millhouse, while on border patrol, receive a message from Matthews, a secret agent when they have never met, warning them that a load of gunpowder is to be smuggled over the border. They intercept Hank and his smugglers and rout them in a gunfight. Returning to Border Patrol Headquarters, Sunset and Frog learn that the U. S. Army, under the command of Sunset's brother Lieutenant Victor Carson, have been given full authority over the Border Patrol station. Meanwhile, "New Orleans", head of the anti-statehood faction and the smuggling, learns that Matthews is a double agent and kills him, appropriating his identification badge. Posing as Matthews, "New Orleans" tricks Lieut. Carson into sending his troops onto a wild-goose chase to clear the way for a big gold shipment to be smuggled over the border.