Billy and his hounds have a celebrated reputation in the area near his home. They capture more raccoons than any other team of hunters. His grandfather proudly sells the hides at his store. He also takes pride in boasting about Billy’s hunting skills, at times even exaggerating his successes. Billy patiently tolerates his grandfather’s embellishment of his hunting adventures.

One day, Billy takes a bag of corn into town to have it ground into meal for his family. When he arrives at his grandfather’s store, his grandfather is too busy to grind the corn immediately. As Billy waits for his grandfather to serve his customers, he sees two young boys approach. Rubin and Rainie Pritchard are mean-spirited bullies. Rubin is big and aggressive; Rainie is malicious and bad-tempered. The entire Pritchard family has a widespread reputation as unfriendly, lazy, and corrupt. Rubin is two years older than Billy is, and Rainie is close to his age. This day, they order chewing tobacco. When Billy’s grandfather objects to boys their age using tobacco, they say it is for their father. Then they chew it in front of him.

Billy typically avoids the Pritchard boys because they try to provoke him into fighting. Although he does not like them, his mother has instructed him to treat them kindly. When they approach him, he dreads the coming confrontation. The Pritchard boys have heard about Billy’s hounds and their expertise in trapping raccoons. The boys argue that the stories are too difficult to believe. They wager that their dogs can hunt better than Billy’s. Billy laughs at the mere suggestion and tells them his grandfather can verify his successes. When Rainie questions his grandfather’s honesty, Billy is prepared to fight.

Billy’s grandfather intercedes and asks the Pritchard boys what they want. They explain that they want to make a wager. Rubin stakes two dollars on a bet that Billy’s hounds cannot capture an elusive raccoon they refer to as the “ghost coon.” Billy knows the Pritchard boys cannot be trusted and he refuses the bet. When Rainie calls him a coward, both Billy and his grandfather take offense. Billy’s grandfather accepts the bet on Billy’s behalf and gives Billy two dollars as security for his portion of the wager.

Because he knows that the Pritchards can be cruel and dishonest, Billy’s grandfather warns them that if they harm Billy in any way, then he will see that they land in jail. The next night, Billy meets the Pritchards, shows them his two dollars, and the hunt begins.

Billy’s dogs find the scent of the big “ghost hound” very quickly. They pursue the raccoon and stick to its trail despite its efforts to lose them. Time and again, the raccoon crosses the river, hoping the dogs will lose his scent in the water. After a long while, however, the raccoon heads for the tree where he is usually able to escape. Billy’s hounds follow it, and the Pritchards feel certain the raccoon will be lost and they will win the bet.