In 1889, the inhabitants of Rejection rely entirely on the nearby silver mine for their livelihoods. One day, water from a hot spring triggers the hatching of graboid eggs, resulting in the death of 17 miners. Hiram Gummer, Michael Gross, the mine's owner and Burt Gummer's great-grandfather, arrives in town to assess the situation. After juvenile graboids that can shoot out of the ground (later dubbed Dirt Dragons) attack his camp one night, he is shocked by their presence. One of his companions, Juan Pedilla, Brent Roam, kills one with a pickaxe, and the pair escapes while four others accompanying them are killed.
Inexperienced with and not fond of firearms, Hiram puts out a call for a gunfighter, to which Billy Drago as Black Hand Kelly responds. Hiram and Kelly do not click at first, but Kelly succeeds in conveying to Hiram some of his attitude toward firearms and life in general. Hiram, Juan, and Kelly discover that a total of four graboids have hatched, including the one Juan killed earlier. Kelly is later eaten alive by a now fully grown graboid. Hiram decides to abandon Rejection and tries to convince the townsfolk to do the same, but they refuse to leave their homes. They also force him to give them the silver mine, threatening to alert potential buyers to the danger if he sells it out from under them. In Carson City, Hiram learns of a telegram revealing that the fully grown graboids have made it through the pass and are headed for the town. Changing his mind, he buys weapons with the last of his valuable belongings, heads back to Rejection to lead a last stand against the graboids, and helps the town ready itself.
After two graboids are killed, the third one adapts and avoids all of the traps. Hiram tricks it into coming to the surface and then attaches it by the tail to the flywheel of a steam traction engine. The graboid is reeled in and slammed against the front wheels and boiler with such force that it is explosively decapitated on impact. With the creatures dead, the town decides to keep them secret out of fear that no one would settle in the area if their existence were known, and use the proceeds from the mine to pay for their belongings. Hiram settles in Rejection (renamed Perfection), building his home in the same place where his great-grandson Burt's would one day be. He is also given a Colt 1865 Gatling gun and begins target practice, enjoying it.
