In the 1910s, the Southern Pacific Railroad (SP) designed a new class of 2-8-2 "Mikado" type locomotives for one of their subsidiary companies, the Houston and Texas Central Railway (H&TC).
The locomotive received multiple modifications while being overhauled for several times during revenue service, including its original extended smokebox being shortened in the 1920s, its boiler pressure being increased from 200 to 210 pounds per square inch on March 1, 1931, and a reception of a worthington feedwater heater system and superheaters on November 29, 1941.
786 was donated to the city of Austin for static display purposes, and it would remain at a vacant lot behind the Central Fire Station between 4th and 5th Streets for the next thirty-four years.
In 1989, the Austin Steam Train Association (ASTA) was incorporated with the intention of recreating historic passenger railroading in Central Texas.
Four months later, a team of both professional and volunteer crews began performing an extensive rebuild on the locomotive under the supervision of Robert Franzen and Gary Bensman.
786 made its first test runs by pulling one passenger car toward downtown Austin to take part in a celebratory festival.
786’s tender, which had been uncoupled from the locomotive for a drawbar inspection, was toppled onto its side by a tornado that struck Cedar Park.
[2] The locomotive remained upright and intact, and a subsequent inspection revealed that the tender received only minor superficial damage.
[4] The ASTA initially planned to weld the crack within a 90-day period, but after it was determined the damage was unrepairable, the group opted to replace the saddle with a newly-cast duplicate.
During the spring of 2009, a new smokebox section has been fabricated, a new trailing axle has been cast, and every remaining original part that was still in good condition was sandblasted and machined.
786's components have been shipped by truck back to Cedar Park with the hopes of beginning the reassembly process of the locomotive's class 5 rebuild.
As the 2010s progressed, the smokebox door was reinstalled onto the boiler, the frame was covered to be protected from the weather and elements, the wheels were painted black, and any corroded component on No.