During an audience with the dimwitted Prince Regent (Julian Fellowes), Sharpe is introduced to Lord Fenner (Nicholas Farrell), the man responsible for the regiment's troubles.
Fenner insists that the Second Battalion exists only on paper as a means of paying troops who have been scattered for various reasons until they can be placed into a proper unit.
They are trained by the brutal and effete Lieutenant Colonel Girdwood (Mark Lambert) and his underling Sergeant Lynch and then auctioned off to other regiments by Sharpe's old enemy, Sir Henry Simmerson (Michael Cochrane), with Fenner getting a kickback.
Lawford, on his own initiative, approaches Fenner and proposes a solution—the South Essex gets its men and Sharpe is given command of a rifle battalion and sent to North America.
Sharpe arrives at Simmerson's house too late to stop Girdwood, but he sees an invitation to a party hosted by the Prince Regent.
Thanks to Lady Camoyne's blackmail of Fenner, Sharpe gets the men he came for and goes back to fight in Spain, saving the regiment from being deleted from the army list.
Girdwood is invalided home, and Sharpe takes command of the Prince of Wales' Own Volunteers, leading them on to victory.