Billy is coming home from work one day when suddenly he hears some dogs up the street fighting. He goes to check it out and finds them picking on a redbone hound. He saves the dog and cares for it through the night.
It reminds him of his childhood. When Billy was ten years old he lived on a farm in the Ozark Mountains of northeastern Oklahoma. He wanted two good coonhounds very badly, he called it puppy love, but his papa could not afford to buy him the dogs. For many months, Billy tries to content himself with some rodent traps his papa gives him, but he still wants a dog. Then one day he finds a sportsmans catalog in an abandoned campsite.
In it he sees an ad for good hounds, at $25 each. He decides he wants to save $50 and order himself two hounds. Billy works hard, selling fruit and bait to fishermen, and gathering fruit that he sells to his grandfather at his store. Finally, he saves enough money and gives it to his grandfather to order the dogs for him and asks him to keep it s secret. When a notice comes that they have arrived at the mail depot in the nearby town of Tahlequah, they decide to go into town the next week. That night Billy decides he can not wait any longer.
He packs himself a little food, and heads of for town following the river through the woods. He walks all night, and finally reaches town in the morning. The people in town laugh and stare at the young hillbilly, but it does not bother Billy he is there on a mission to get his dogs. He finally collects his dogs and walks back out of town with their small heads sticking out of his bag. Some schoolchildren mob around him and knock him down, but the town sheriff rescues him.
The sheriff is impressed with Billys determination, and says he has grit. That, night Billy camped in a cave with his two puppies. They wake up in the middle of the night to hear the call of a mountain lion. Billy builds a fire to keep them safe, while the bigger of the two dogs, the male, barks into the night air.
The next morning he stops at the campsite where he found the catalog. There he sees the names Dan and Ann carved into a tree. He decides to name the dogs Old Dan and Little Ann. Billy was nervous about going home.
He was afraid his parents would be worried and angry with him for leaving unexpectedly. They were not mad though they were actually proud. His grandfather had told them everything and they understood. Once Billy was home he wanted to start training his dogs.
He needed a raccoon hide and went to his grandfather for help. His grandfather shows him how to make a trap that will lure a coon, and after many tries he finally catches one. His father helps him kill it after he caught it. Using the hide, Billy trained his hounds. He drags the coon over a certain path, and then the hounds have to track the hide by smelling its scent. By the time raccoon season starts in the fall they are ready.
On the first night of hunting his dogs tree a coon in a tree that Billy said was the big tree of the bottoms and he had always admired it, so he decides not to cut it down. When the dogs see his intent they pout. He then remembers that he had promised his dogs that if they could tree a coon he would do the rest. Billy then becomes determined to cut down the gigantic tree. His father finds him in the morning and brings him food.
Later that evening his grandfather shows him how to make a scarecrow, to keep the coon in the tree so he can go home and eat dinner. The next morning he finds that Old Dan and Little Ann have taken turns guarding the tree all night and he is very proud of them. He works all day until he gets blisters and thinks he is going to have to give up. However, the wind pushed the tree down for him and his dogs kill the coon and they all proudly head for home.
When he gets home he tells his papa that he prayed and does he think the wind pushing down the tree was God answering his prayer. Billy goes hunting almost every night and his dogs get smarter and smarter. His grandfather tells him that coonskin prices are up because there is a fad for coonskin coats in the New England states. Billy starts hunting even more and then sells the skins to his grandfathers store and gives the money to his papa who is doing Billys chores for him while he hunts. Sometimes the coons would try to trick the dogs and Old Dan would end up in trouble. Once he was in a muskrat hole and Billy had to get him out and another time he got stuck in a tree trunk.
Little Ann got into her own trouble too. One night after the first snow of the year had arrived Little Ann fell through ice. Billy sees her barely hanging on to the side of some ice and thinks it is hopeless and sits down and prays for a miracle. His lantern falls and makes a noise and that is when he realizes that he can bend the handle and fish her out of the water.
When he got home he thought about how the lantern fell just as he was praying and got his attention. He asked his mother if all prayers are answered and she thought it was sweet that he asked such a question. One day while Billy was at his grandfathers store the Pritchard boys came up. Ruben and Rainie Pritchard are the meanest boys in the area. They tell Billy that his hounds are not tough and that his grandfather is crooked. Billys mother always tells him not to mind the boys because they are abused and can not help being mean.
This time though it was different because they insulted his dogs and his grandfather. They dare Billy to a bet; he is apprehensive but has to accept. Billy has to meet the boys at their land and try to catch the legendary ghost coon. The chase is not going well when all of sudden the wind picks up and Little Ann catches a scent and discovers the coon in a nearby hollow fence post.
When the coon is finally treed Billy thinks it is impressive and does not want to kill it. Just then Old Blue the Pritchards dog appears. Ruben attacks Billy and wrestles him to the ground so Old Blue can kill the coon. While they are fighting Rainie shouts that Old Dan and Little Ann are fighting Old Blue. Ruben gets off of Billy and gets his ax and runs after them going to kill Billys hounds.
Ruben trips on a stick and falls on the ax killing himself. Billy pulls his dogs off of Old Blue and then checks on Ruben finding him dead. Very scared Billy immediately ran for home. Billy felt bad for days and did not want to go hunting. Finally he goes and puts flowers on Rubens grave. Doing that makes him feel better and he goes camping that night.
Billys grandfather sent for Billy one day and told him that he had been keeping up with how many skins he had turned in to the store. He told him that he had qualified to be in a coon hunting championship. Billy, his grandfather, and father take a buggy to the contest. When they arrive they see the campsite filled with tents, each containing adult coon hunters with expensive gear and beautiful hounds. Somehow though Little Ann won the beauty contest held on the first day of competition.
The other coon hunters were kind and congratulated Billy. Billy has to catch three coons to qualify for the finals. Billy chooses a good starting point for his hounds and they quickly catch their first coon of the night. A blizzard comes and all the hunters head in to their campsite. That is when they realize Billys grandfather is missing.
They go out searching for him and find him unconscious and with a twisted ankle. Once he revives he tells Billy there is three coons in a certain tree and to chop it down to get them. He kills two and one escapes. He gestures toward the third one and the dogs go after it. He chases after them and finds them with the coon. He kills the coon and wins the jackpot of $300.
One night later on his dogs tree a mountain lion and the big cat attacked Old Dan and Little Ann. Billy rushed in with his ax and then when the cat was about to pounce on him the two dogs jump in and save his life. The dogs fight with mountain lion until Billy gets a good lick with the ax across its back. Both dogs are hanging limply around the throat of the mountain lion and clamping down on its jugular. Both dogs where injured though, Little Ann had a cut on her shoulder, but Old Dan was much worse. Billy cries while he uses the dogs blood to make mud and fill up the wounds, he was trying to stop the bleeding long enough to get him home.
Walking home he hears Little Ann whimper, Old Dan had fallen behind and his innards were hanging out of his body and hung on a bush. Billy gently pushed them back in and got him home. When they finally return home, his mother runs the dog’s entrails through water, but it is not enough. The dog dies, and Billy is crushed.
He buries Old Dan on a high hill overlooking the valley. In a few days, it is clear that Little Ann has lost her will to live. She dies too, and he buries her next to Old Dan. Billy is heartbroken; he says that God is not fair. Billy’s papa tries to tell him that it is all for the best, because with the money Billy has earned, the family hopes to move to town. Billy does not completely recover until on the day of the move, he goes to visit the dogs’ graves and finds a giant red fern.
According to Indian legend, only an angel can plant a red fern. Billy and his family look at the fern in awe. They leave him, and while he is looking at the fern he makes peace with the fact that his dogs have died.