Dally is not happy when Johnny tells him that the two boys want to go back home and turn themselves in. Dally has spent time in juvenile detention and jail before, and he doesn't want to see Johnny turn out the same way that he turned out. Dally tells Johnny that he doesn't want to see him hurt.
"... you get hardened in jail. I don't want that to happen to you. Like it happened to me..."
Pony is surprised to hear Dally talk about the past since it was not a good time for him. Dally spent much of his time living on the streets of New York City and had been jailed at the age of 10. He never talked about his bad times there; whenever Dally talked of the past, it was only to "brag." Dally had become "cold and hard and mean," but he was happier in Oklahoma, where he got to ride horses--one of the few things that made him happy.