On his way home with his new pups, Billy beds down "in a cave with a stream close by".  The cave provides him with shelter from the elements, and a defensible haven from wild beasts which might want to harm him.

Billy does not take the road from town back to his home, because to follow the road would entail a trip of thirty-two miles.  Instead, he heads over the hills, "as the crow flies", which cuts his journey to twenty miles.  He is traveling alone, barefoot, through the wilderness, and while there would always be some risk of danger in such a situation, Billy is well-acquainted with basic survival skills, and chooses his shelter wisely.  Upon finding the cave, he makes a bed of leaves for himself and his pups, and builds a fire which "would last for hours".  The fire would keep the cave warm, and serve to frighten away most wild creatures. 

Danger, as embodied by the fierce cries of a mountain lion, does threaten Billy and his pups in the night, but Billy keeps his wits about him, and, remembering what his father had taught him, keeps the mountain lion at bay.  Thankful that he had had the presence of mind to cut and store enough wood to last the night, he builds up the fire and stands at the entrance of the cave "whooping and throwing rocks down the mountainside, hoping to scare the mountain lion away".  His tactics are effective, and the lion finally gives up and leaves "to stalk other parts of the mountain", and in the morning, Billy and his pups continue on their journey home (Chapter 5).