Ned and Nellie argue about adoption when Nellie takes in an abandoned baby; Stringy returns home and encourages Willie to apply to a photography school.
Willie and schoolmates, Mollie and Angus, are forced to spend the night in an abandoned house reputed to be haunted on a dare from pit boy Spider; there, Willie thinks he sees his father who advices him that things will get better.
After Mr Frawley unjustly fires Ned to set an example, Rose then wants to take Sarah, Maggie and Willie back to Halifax afterwards; Willie refuses to leave town until Ned breaks off the engagement.
After Willie's horse, Sable, goes missing, Willie suspects that he may have been stolen and he is forced to sneak into the coal mine with Ned to look for his horse.
Ben vouches for Ned to prove that the pit pony Sable is Willie's horse; Willie becomes determined to find out who stole his horse, and soon discovers that the "treasure" that Spider is still digging on the beach for is in fact stolen loot.
When Ned is temporally laid off as the mine puts in new electric wires, Nellie thinks about getting a job; but Ned, due to his pride and ego, strongly opposes her choice to look for work; meanwhile, Miss Harper sets up a reading class at the mine.