Owen [Luke Benward] leads a quiet, bookish life when he and his distracted older sister Lilly [Brittany Curran] are left to fend for themselves while their Dad [John Farley] and Mom [Kenda Benward] are away. On days after school, Owen delivers the paper and copes with a relentless school bully named Dexter [Cameron Monaghan] and his rough crew, who bother him by tossing his bike, newspapers, and even pants off a bridge. To escape, he retreats to a forest hideaway where he builds small inventions and spins tall tales about a fearsome figure he calls the Mad Man of the Mountain—a supposedly dangerous man who once worked in a circus freak show and now lives among the pines to be free. It’s there that Owen crosses paths with three troublemakers—Blackie [French Stewart], Bud [Kevin Farley], and Arty [Kelly Perine]—who hold a mistreated dog and begin to pull Owen into a much larger adventure.
Unbeknownst to Owen, the thugs have already pulled off a diamond heist and have supposedly hidden the stolen jewels on the dog’s collar. With Owen’s help, Diamond escapes the clutches of the trio and the boy forms a bond with the golden retriever he names Diamond. After he reads a newspaper account about the heist, he realizes the thugs are the prime suspects and that Diamond may be caught in the crossfire. He takes Diamond to the police, but they doubt his story, chalking it up to a tall tale about a “Mad Man” who’s made friends with a bigfoot. Determined to protect Diamond, Owen hides her at his forest retreat, visiting often to feed and comfort her. Meanwhile, the thugs intensify their search, tracking Owen to his home after getting a lead from Dexter. Owen narrowly escapes into the woods as Diamond slips away, and the chase continues through the trees.
Owen rigs his hideaway with clever booby traps, hoping to slow down his pursuers. They manage to corner him again, and Blackie finally captures him, tying him to a chair as the thugs inspect Diamond for the diamonds. Blackie grows suspicious when he spots a band‑aid Owen previously put on Diamond’s stomach, a clue that hints Owen’s stories might have real truth behind them. When Blackie corners him and demands the diamonds, Owen directs them to a canoe trailer—the domain of the Mad Man—where the criminals believe the loot is hidden. Bud and Arty jump into the canoe to retrieve the diamonds and end up glued to their seats as another of Owen’s booby traps springs to life. The two quickly discover the collar contains fake diamonds, while the real stash lies hidden in Diamond’s stomach, which makes Diamond ill.
The Mad Man of the Mountain—really Carl Westmeister—plays a pivotal role in the escape, and Diamond ultimately slips away from Blackie, leaving the thugs to face their own peril. The trio is overwhelmed when the booby traps go off one by one and are ultimately swept away toward town in a chaotic tumble that even leads Dexter’s bike crash into a nearby trash bin. The pursuing officers in town arrest the thugs, clearing Owen’s name in the process.
Back home, Owen and Diamond are reunited, though the dog must be treated at the vet for the diamonds removed from her. The police chief explains the truth about the “Mad Man”: he wasn’t a freaky exile at all, but Carl Westmeister, a man who had lived alone in the woods for years after a devastating car crash that claimed his wife. With Diamond’s welfare in mind—and Lilly’s warned allergy to dogs in mind—Owen contemplates what’s best. He decides to hand Diamond over to the real Mad Man so she can recover and thrive. The next day, he climbs back up the mountain to deliver Diamond to Carl, who thanks Owen from afar. In a closing scene, Owen and his girlfriend watch a fireworks display and share a kiss, while the Mad Man and the thugs also watch, their fates now intertwined with the small-town wonder Owen helped untangle.
