Rex Derwent and Peter Drake prepare to take Peter's Australian terrier, 'Dim', to their local Dog Show. The night before the show, Rex overhears two men plotting to 'take care' of Sam Stemmer's dog Foxo to spoil his chances at the show. Rex warns Sam and finds a packet of red dye the two ne'er-do-wells have dropped.
At the dog show the next day, Sam informs them that Foxo has indeed been covered with red ink. The boys suspect Luke Dingwall (who has entered his dog, Lee of Lumsden) and his friend Mr Pellingham, and when they see that Pellingham's shirt has a red stain, they confront him in front of the judges and show the packet of red ink Rex found as proof.