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Mexican bandits fleeing north to California under the leadership of clever and charismatic El Cuchillo ride into Los Angeles and decide to steal a shipment of silver. Don Diego quickly becomes suspicious of them and saves the day as Zorro, but the sword fight between El Zorro and El Cuchillo has to be aborted when Sgt. Garcia and his lancers arrive. Nevertheless, Zorro leaves Cuchillo with a "Z" slashed into his coat and a warning to get out of California.