First, they are run off the road by Mr. Garrett (Peter McAllum), a prominent local horse breeder obsessed with hunting a beautiful brown wild stallion, as he and his men are in pursuit.
The night they arrive, Anna hears the wild horse out in the woods behind the house and frees it from loose wire in which it had been caught.
Meanwhile, a local shop owner Mr. George Peabody (John Watson), who met the Petersons on their way into town and who seems aware of a connection between them and Mr. Garrett, informs his friend of their arrival.
Later, while Anna's mother runs into town for house supplies, she and Mike sneak off to check out the Pony Club in spite Rose's expressed wishes.
Anna and Mike start school the following day, and find themselves the targets of a band of bullies, led by Tony and Ginny.
Only Wayne goes out of his way to befriend Anna, telling her about Old Gonzalez (Jose Maria Caffarel), the mysterious man she had seen in the woods, a supposed murderer who lives in the wild.
In contrast to Gonzalez's murderous reputation, he takes Anna to his remote animal sanctuary to rest and to check Eclipse for injuries.
Wayne apologizes on behalf of his siblings, who he states only bullied her to get on the right side of their father, and explains his complicity in perpetuating rumours of Gonzalez's reputation as a murderer.
He also tells her of his own horse riding accident during which he was injured while trying a difficult jump at his father's urging, resulting in his current limp.
One day, Anna's father found Garrett whipping the prize stallion, slated to win the Melbourne Cup race.
Gonzalez accuses him of leaving the stable door open all those years ago, declares that rather than leading the horse away John Peterson had been tracking it, and chastises Garrett for his arrogance which has caused so much hurt to those around him.