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In the small Scottish mountain town of Glen Urtach, shepherd Mr. Milton nearly drowns his sheep-tending collie dog Lassie while punishing her for not performing her duties properly. With no further need for Lassie, Milton gives her to Dr. William MacLure in exchange for another dog. While negotiating the trade, Milton learns that his son Tammas has been secretly apprenticing with William in the hope of someday becoming a doctor. Angered by the discovery, Milton criticizes his son for refusing to become a farmer. Later, while crossing a shallow river, William discovers that Lassie suffers from an inexplicable fear of water. Realizing that Lassie will be a poor sheep herder, William sells her to a dog trainer at the Kildrummie Fair. A short time later, when William finds out that the dog trainer is using cruel training methods, he buys Lassie back. While traveling through a snow storm to visit Saunders, an ailing patient in another town, William approaches a storm-damaged bridge, and realizes that the only way he can cross is without the added weight of his medical supplies. With help from Lassie, who carries the supplies on her back, William crosses the bridge successfully and arrives safely at Saunders' place. After treating Saunders, William discovers that Tammas has fallen ill with appendicitis. As Tammas' condition worsens, William decides to use chloroform, an untested anesthetic, to perform an operation on him. Before administering the chloroform to Tammas, William tests it on Lassie. Following the successful operation, William persuades Mr. Milton to allow Tammas to study medicine at Edinburgh. After bidding farewell to his sweetheart, Margit Mitchell, Tammas leaves for the university. Years pass, and one day, while crossing through the country in a storm, William suffers an injury. Lassie, having finally overcome her fear of water, brings help to William, but the doctor dies a short time later. Tammas, now a doctor, returns to Glen Urtach for William's funeral, and after being reunited with Margit, agrees to take over William's job.