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The story opens in 1952. John Grady and Billy work together on a cattle ranch south of Alamogordo, New Mexico, not far from the border cities of El Paso, Texas, and Ciudad Juárez in the state of Chihuahua, Mexico. The ranch's owners are kind, but face an uncertain future in a dying industry. Recently devastated by drought, cattle ranches around El Paso are struggling, and may be claimed by the Department of Defense to become military areas through eminent domain. Though the cowboys barely make a living, John Grady and Billy love life on the open range, and John Grady - as detailed in "All the Pretty Horses" - is a master at training horses.

During a visit to a brothel in Juárez, John Grady falls in love with a young, epileptic prostitute, Magdalena. The couple plans to marry and live in the U.S., and John Grady renovates an abandoned cabin, turning it into a home. But Magdalena's brothel is run by Eduardo, a formidable adversary also in love with the young girl. Billy attempts to dissuade John Grady, but feels obligated to help the couple.