Nancy Drew is invited to Shadow Ranch in Arizona for a vacation. On the first day there, Nancy discovers that the owners of the ranch, Ed and Bet Rawley, are gone. The previous evening, a glowing horse came galloping up to the ranch, causing a huge commotion, and shortly after, Mr. Rawley was bitten by a venomous snake and rushed to the hospital.
Dirk Valentine, an outlaw from the 1880s, was romantically involved with the sheriff's daughter, Frances Humber, who lived at Shadow Ranch. Dirk was arrested and eventually hanged, but local legend says that Dirk's horse has come back to avenge its master and that misfortune will befall whoever sets eyes on it.