As the gold accumulates, the men toil at a feverish pitch - Dobbs swinging away with his pick axe in the mine and Curtin hauling earth. Suddenly in the mine, the ceiling cracks, the timbers break and the tunnel caves in over Dobbs, burying him alive in the deathly grave. Curtin hesitates for a moment, turning away from the collapsed tunnel (contemplating more riches without a third man). But then his humane instincts and conscience overcome his greed and prompt him to enter the mine to rescue his companion. He calls out "Dobbs," claws through the rubble, and finally reaches Dobbs, who is unconscious and covered with rocks. He drags his body out of the narrow tunnel entrance. After Dobbs regains his senses, he thanks Curtin for saving his life:

Dobbs: I owe my life to you, partner.
Curtin: Forget it.

That night, after measuring out the yellow sand into three parts, Dobbs leaves the circle of the campfire to go hide his loot. The partners begin sharing what they plan to do with their gold earnings:

• Howard reveals that his ultimate ambition is to own a small business - a general store, and enjoy his latter years without ever prospecting again:

  I reckon I'll settle down in some quiet place. Get me a little business...a hardware or grocery store, and spend the better part of my time readin' comic strips and adventure stories. Ha. One thing's for sure. I'm not gonna go prospectin' again and waste my time and money trying to find another gold mine.

• Curtin has an idea to buy land and plant fruit trees in an orchard with his share of the gold. He remembers fruit-picking in an idealized community when he was younger, when fellow workers sang in the evenings together:

  I figure on buying some land and growing fruit - peaches maybe...One summer when I was a kid, I worked as a picker in a peach harvest in the San Joaquin Valley. Boy, it sure was something. Hundreds of people, old and young, whole families workin' together. At night, after a day's work, we used to build big bonfires and sit around and sing to guitar music, till morning sometimes. You'd go to sleep and wake up and sing, and go to sleep again. Everybody had a wonderful time. Ever since then, I've had a hankering to be a fruit grower. Must be grand watching your own trees put on leaves, come into blossom and bear...watching the fruit get big and ripe on the boughs, ready for pickin'...

• Dobbs returns to the campfire scene (with film noirish shadows), and shares his own plans on what he predictably wishes for - libidinous yearnings for bodily comforts (at a spa, a haberdashery, a restaurant - and a whorehouse with willing women) and ultimate control to humiliate, victimize and command others - a sharp contrast to Curtin's plans:

  Well, first off, I'm goin' to a Turkish bath and I'm gonna sweat and soak till I get all the grime and dirt out of my system. Then I'm goin' to a haberdasher's and I'm gonna get myself a brand new set of duds...a dozen of everything. Then, I'm goin' to a swell cafe - order everything on the bill of fare, and if it ain't just right, or maybe even if it is, I'm gonna bawl the waiter out and make him take the whole thing back...

  Both Curtin and Dobbs imagine the next thing "on the program" - dames, but Howard cautions: "If I were you boys, I wouldn't talk or even think about women. It ain't good for your health."

Howard suggests a limit on their take of about $25,000 worth of gold apiece and at that point, "we pull up our stakes and beat it." Dobbs objects to the "small potatoes" amount - he wishes to double or triple the amount, but Howard states that it may take too long and the vein of gold might not hold out. Nevertheless, Dobbs is greedy for more:

I'm young. I need dough and plenty of it.

Dobbs is explosively insulted when Curtin insinuates that he is a "hog." Since Dobbs claims that he is the "biggest investor," he defensively argues that he expects the "biggest return" and in principle would be within his rights to ask for more from Curtin.

Curtin: There's no use makin' hogs of ourselves.
Dobbs: Hog, am I? Maybe you don't know it, but I'd be within my rights if I demanded half again as much as you get.
Curtin: How come?
Dobbs: There's no denying I put up the lion's share of the cash, is there?

Howard wisely cautions that they not be so rapacious and pecuniary: "I think it would be wise not to put things strictly on a money basis." Curtin uses the scales to weigh out a portion of his gold dust (with interest) to repay Dobbs for his bigger share. But Dobbs takes the dust and flings it away into the fire: "I just don't like being called a hog, that's all."

That night, everyone is infected by growing suspicions of their companions. Dobbs is restless in his sleep when a tiger's roar is heard. He stirs, turns, and sees Howard's blanket roll is empty. He puts on his boots, grabs his revolver and then moves out of the campsite - feeling suspicious and paranoid about the security of his stash. Howard, returning from a "midnight stroll" to see whether the burros are OK, is startled to see Dobbs jumping out at him. After Howard returns to the tent, Curtin gets up and goes to have a "look-see" at his cache of gold. When Dobbs returns, he is suspicious when he notices Curtin's absence. Curtin is counting his sacks of gold, hidden in a hollow tree - he returns to the tent just as Dobbs is about to leave again. Howard is tired of their festering suspicions that compel them to check and recheck their earnings:

It's come around to me again, but I won't take my turn if you guys'll stop worryin' about your goods and go to bed. We've got work to do tomorrow.

The next morning as Dobbs hitches a burro, he mutters irritably to himself about the imagined treachery of Howard. "Talkin' to himself a mile a minute," he fantasizes the others will try to steal his share of the gold while he is away:

You can't catch me sleepin'...Don't you ever believe that. I'm not that dumb. The day you try to put anything over on me will be a costly one for both of you...Any more lip out of you and I'll pull off and let ya have it. If ya know what's good for ya, ya won't monkey around with Fred C. Dobbs.

His sanity crumbling, a half-crazy Dobbs believes he has been elected to go to town for provisions, so his partners can discover the location of his gold bags. Howard prophetically suggests that bandits might waylay him even if he took his gold with him - they would kill him for the shoes on his feet. Howard chooses to ignore the challenges of Dobbs, to keep the shaky peace:

Dobbs: Don't get the idea you two are putting anything over on me.
Howard: Take it easy, Dobbs.
Dobbs: I know what your game is.
Howard: Well, you know more than I do.
Dobbs: Why am I elected to go to the village? Why me instead of you and Curtin? Oh, don't think I don't see through that! You two have thrown together against me. The two days I'd be gone would give you plenty of time to discover where my goods are, wouldn't it?
Howard: ...Why don't you take your goods along with you?
Dobbs: And run the risk of having them taken from me by bandits?
Howard: If you was to run into bandits, you'd be out of luck anyway. They'd kill you for the shoes on your feet.
Dobbs: Oh, so that's it! Everything's clear now. You're hopin' bandits'll get me. That would save you a lot of trouble, wouldn't it? And your consciences wouldn't bother you none neither.
Howard: All right, Dobbs. Forget about it.

The feverish greed of Dobbs and the ruptured social relationships in the group are illustrated in the next memorable scene. When Curtin sees a big yellow and black Gila Monster lizard crawl under a large boulder, he picks up a piece of timber to turn over the large rock, accidentally and unwittingly stumbling upon the hiding place of Dobbs' treasure. Dobbs is enraged and draws his revolver on Curtin - he refuses to believe Curtin's "good story" that he is only prying the rock up to get at the lizard in the crevice. Curtin dares him to reach under the rock:

OK, I'm a liar. There isn't a Gila monster under there. Let's see you stick your hand in and get your goods out...Reach in and get your goods. If you don't we'll think you're yella, won't we, Howard? They never let go, do they Howard, once they grab onto you? You cut 'em in two and the head'll still hang on until sundown, I hear. By that time, the victim doesn't usually care 'cause he's dead anyway. Isn't that right, Howard?...What's the matter, Dobbsie? Why don't you stick your hand right in and get your treasure? It couldn't be because you're scared to, could it, after the way you've been shooting your mouth off. Show us you ain't yella, Dobbsie. I'd hate to think that my partner had a yellow streak up his back.

Taking the challenge, Dobbs kneels down beside the boulder, but hesitates to put his hand in - in fear, sweat pours down his face. Lacking the courage of his convictions, he withdraws his hand and springs to his feet - refusing to admit that his suspicions are faulty. He takes wild aim at Curtin: "I'll kill you, you dirty, thieving..." Howard and Curtin take the gun from him and the rock is upturned, revealing the poisonous lizard on top of Dobbs's bags of gold dust. Curtin shoots the venomous reptile - symbolically, it twitches and dies on the bags of wealth - as Dobbs walks away, staring blankly. The humiliating exposure of Dobbs' cowardice and madness cause him to begrudge Curtin from now on.

Curtin, who is ultimately sent for supplies, enters the village and notices a circle of townspeople in the village square surrounding Federales officers who are speaking to tough-looking Mestizo bandits in big hats and with bullet holders crossing their chests - they are two members of the bandit gang that attacked the train. The Lieutenant opens a billfold, takes out a small cardboard square, and accuses them of theft - during a brief interrogation. The two prisoners are marched off to the cemetery to be summarily executed. In front of the general store, another American from Texas named Cody (Bruce Bennett) knows Spanish and explains to Curtin what just happened:

It seems between 'em they had a diamond ring, pearl earrings, and quite a lot of money, and a railway ticket with the date of the Agua Caliente train robbery on it. They've been here several days, drinking and shooting off their cannons so that the villagers are afraid to stick their noses out of their huts.

Cody follows Curtin into the store to learn more about him. He describes the method of swift justice in Mexico:

You know, the Federales don't operate in our American way. They aren't fingerprint experts, that is, but they can follow any trail, and against them, no hideout's any use. They know all the tricks of the bandits. Yep, you can bet your sweet soul they'll trace down every last one of that group that attacked the train. It'll take time - months maybe - but they'll do it.

While Curtin conducts business with the storekeeper, Cody, a lean American, explains how he rarely sees Americans in that remote area of Mexico. He attempts to learn more about Curtin's business in the rugged country:

Not many Americans get around this way. You're the first one I've bumped into for a long time.

Tight-lipped about his gold-prospecting to disguise his real "game," Curtin explains that he is a professional hunter - tracking tiger cats and "anything of commercial value." Cody suspects that Curtin is looking for "pay dirt" instead:

I've a hunch there's loads of the real goods up in those mountains...I can look at a hillside miles away and tell you whether it carries an ounce or a shipload...If you haven't found anything up there yet, I'll come along with ya and put your nose in it. There's indications in this valley, lots of indications. By tracing the rocks, I find they come from that ridge up there, washed down by the tropical rain...

Outside the store as Curtin loads up his burros, Cody proposes to join him: "I meant what I said about going along with you. Those are my two burros. I'm all packed up and ready to start if you'll let me go with you back to your camp." Curtin politely refuses his company.

Back at the camp that night, Curtin explains how he has been followed: "I guess it's only a matter of time until he shows up here." Vindictively, Dobbs suggests ways to eliminate the interloper trailing them - when all of a sudden, the "stranger" appears in the shadows with his two burros next to a forked, Y-branched tree [symbolically representing the choice that must soon be made regarding his fate]. Dobbs rises, eyes Cody up and down, and then invites him over into the light of the fire. Cody knows he is unwelcome, but explains he is in need of friendly American companionship: "I simply couldn't resist the desire to sit around and jaw with an American." Snarling like a dog, Dobbs is very blunt with the visitor and orders him to leave at daybreak:

We're full up. No vacancies. Understand? And in case I don't make myself clear, I think you'd be doin' yourself a favor by packin' up and gettin' out of here tomorrow morning. Go back where you came from. Take our blessings with ya. (Howard hands Cody a plate for grub.)...Help yourself. We don't mind 'cause we don't let guys starve to death. Tonight you're our guest. But tomorrow morning, look out - no trespassin' around here. Ya know - beware the dogs. Get it?

Before bedding down for the night, Cody divulges his suspicions about their 'hunting' game: "...it's mighty good ground for something else...GOLD." The three partners fear that they will be murdered in their sleep, so they take turns being watchdogs throughout the night.

By morning, tensions have mounted, and Dobbs is even more belligerent and critical toward Cody - begrudging him for taking a little water to make coffee. The stranger regards their company as brutish and uncivilized:

Cody: I thought perhaps I was among civilized men who wouldn't begrudge me a little fresh water.
Dobbs: WHO'S NOT CIVILIZED?!

Dobbs' temper explodes and he punches Cody in the face, felling him to the ground. But the man refuses to leave: "I mean to stay right here. The brush and the mountains are free, aren't they?...Whatever you say or don't say, tomorrow I start to dig for gold here." Cody realizes the danger of being unwelcome in their midst, now that he knows they are gold miners. He offers them three choices and analyzes each option - preferring the last option to join them:

Oh, I know very well you guys could bump me off any minute you wish, but that's a risk worth running, considering the stakes. Let's lay all our cards on the table. As I see it, you guys have got to do one of three things: kill me, run me off, or take me in with you as a partner. Let's consider the first. Another guy may come along tomorrow or maybe a dozen other guys. You start bumping people off, just how far are you prepared to go with it? Ask yourselves that. Also, don't forget, the one actually to do the bumping off would forever be in the power of the other two. The only safe way would be for all three of you to drag out your cannons and bang away at the same instant like a firing squad...As for choice number two, if you run me off, I might very well inform on you...Twenty-five percent of the value of your find is the reward I'd get paid and that would be tempting, mighty tempting...Let's see what number three has to offer. If you take me in with you as a partner, you don't stand to lose anything. I will not ask to share in what you've made so far, only in the profits to come. Well, what do you say?

The three mining partners discuss each possibility for several moments while Cody attends to his burros. Although Howard is impressed by the interloper's fairness and favors option three, Dobbs predictably asserts his position:

Fred C. Dobbs ain't a guy likes bein' taken advantage of - do the mug in, I say!

The deciding "majority" vote is left up to Curtin - who sides with the avaricious Dobbs. They agree that their only alternative is option number one - to execute Cody to protect their interests and avoid sharing their find.

As they ascend to the rock ridge with guns drawn, approaching close to Cody, he gestures down into the valley and cautions them before they carry out their plan: "Better take a look down that hill first...They're not soldiers, they're bandits and they're not after gold, but after guns and ammunition. Someone in the village must have told them about the American hunter up here." In a wide vista shot, the prospectors look down and spot a group of about a dozen mangy-looking bandidos making their way toward them across the scrubby desert and up the mountain. They quickly drop their plan of murder. Howard starts thinking of ways to defend against them by making a stand in the natural trenchline of the ravine - "The best thing is to make a fight of it." In the meantime, Cody is recruited to stand as a lookout, watching the movements of the dozen bandits led by the chieftain wearing a gold hat - "the man from the train robbery." Curtin is ordered to hide the burros in a thicket, and Dobbs and Howard wrap up their belongings and dump them in a trench.

About an hour later, the bandits appear one after another, coming up the trail and dismounting near where the four Americans hide behind rocks. When one of the Mexican bandits approaches too close, Dobbs raises his rifle and calls out: "Alto." (Stop) The bandit sees Dobbs and calls to his companions in Spanish. Their malevolent leader, Gold Hat (Alfonso Bedoya) steps forward and at first speaks congenially to Dobbs. Then the friendly conversation turns ugly and rage-filled - it is one of the most classic sets of lines in film history:

Gold Hat: Oiga, senor. We are Federales. You know, the mountid poliss.
Dobbs: If you're the police, where are your badges?
Gold Hat: Badges? We ain't got no badges! We don't need no badges. I don't have to show you any stinkin' badges!
Dobbs: You'd better not come any closer.

Gold Hat attempts to appease the 'American hunter' by convincing him that he has only innocent intentions - to acquire his rifle:

Gold Hat: We aren't trying to do you any harm. Why don't you try to be a little more polite? Give us your gun and we'll leave you in peace.
Dobbs: I need my gun myself.
Gold Hat: Oh, throw that ol' iron over here. We'll pick it up and go on our way.
Dobbs: You go on your way without my gun and go quick!

Dobbs fires a warning shot with his rifle at Gold Hat, piercing a big hole in the top of the bandit's hat. After a retreat to have a short discussion with his ragged gang, Gold Hat returns, with one of his smiling compadres, and offers to barter for Dobbs's gun in exchange for a gold watch with a gold chain.

Gold Hat: Look here, amigo. You got the wrong idea. We don't wanna get your gon fer nothin'. We wanna buy it. Look. I have a gold watch with a gold chain, made in your own country. The watch and the chain - they worth at least two hondred pesos - I 'change it fer yer gon. Y'better take it, thatsa good bizness for you!!
Dobbs: You keep your watch. I'll keep my gun!
Gold Hat: O, dju kip it? Dju will kip it?? We won't get it?? I'LL SHOW YOU!!!

From another vantage point, Howard aims and blasts the gold watch. The bandits realize that there's more than one enemy and slowly withdraw. Soon, a fierce gun battle erupts and Cody is killed in the first round of gunfire - with a bullet through his neck. The rival for their gold is conveniently disposed of, but the odds are worsened, as Dobbs comments: "One less gun."