By September 1878, when Territorial Governor Lew Wallace was appointed by the president, many of the Regulators and other fighters had returned to normal life, as many had left the area.

Wallace tasked Lincoln County Sheriff Pat Garrett to reduce lawlessness in the region, and, within three years, he and his deputies had hunted down and killed William "Billy the Kid" Bonney and other figures who had continued to operate in the area.

[8] That same day, Seven Rivers members Tom Green, Charles Marshall, Jim Patterson, and John Galvin were killed in Lincoln, and the Regulators were blamed.

On July 15, 1878, McSween returned to Lincoln with about 41 additional supporters, ten of whom he put up in his home; while the rest found beds throughout the town.

[9] Shortly afterward, a large force hired by the "Murphy-Dolan" faction and led by Peppin, arrived in Lincoln, and surrounded the Regulators at McSween's house.

Now under the leadership of Bonney and Jim French, the Regulators quickly reassessed their position, and forced an escape from the burning adobe house.

[6] Reported casualty figures for the battle varied, but the Regulators lost at least five men, including McSween, while Peppin's posse suffered two dead: Bob Beckwith[13] and Charlie Crawford.

Col. Dudley was placed under investigation for his failure to complete his mission without further bloodshed, but was cleared a year later when the army decided not to file charges.

[10] In September 1878, President Rutherford B. Hayes dismissed Governor Axtell, replacing him with Lew Wallace, who was determined to reduce the lawlessness in the territory.

In 1934, George Coe published his memoir, Frontier Fighter, recounting his part in the Lincoln County War and his friendship with Billy the Kid.

Wallace failed to grant the promised pardon, and ignored Billy's subsequent correspondence imploring the governor to hold up his end of the bargain.