In the saloon, the misunderstood, henpecked Russian Boris, who is often mistakenly called Callahan by his boarding house manager/wife Lily Belle Callahan (Una Merkel) (the former Mrs. Callahan), plays poker with Frenchy:

Please, Frenchy, I am not Callahan. Callahan was my wife's first husband and he's dead. I am Boris Alexandrovich Stavrogin and I'd like to be called by my name.

She bets thirty bucks against his pants just as the Pioneer Stage Coach Line arrives in town. In parallel sequences, the film cuts back and forth between the poker game in the saloon and the grand entrance of the stagecoach on the Main street. After Wash Dimsdale has tidied up the sheriff's office, he alerts the townspeople in the saloon that the town's new, tough lawman is arriving: "Kent, you'd better prepare yourself. You're gonna need a man." Wash expects a fearsome gun-shooter and quickly identifies headstrong Jack as his new deputy after he assaults the stagedriver (Bud McClure) for deliberately making the trip a rough ride. After a misidentification, the sheriff turns and is dismayed to be introduced to the real Destry. The soft-spoken, gawky, mild-mannered deputy steps from the stagecoach holding a frilly parasol and a birdcage for Jack's sister Janice Tyndall (Irene Hervey) as she steps out. Upon his arrival, he is the object of ridicule and laughter:

Bugs Watson: Canary bird.
Gyp Watson: Parasol.

When tempted by her, Boris loses his pants to Frenchy's two Aces - she immediately demands that his pants be stripped from him:

Boris: I'll call. I'll bet my pants.
Frenchy: Two aces.
Boris: I was right. Why didn't I listen to myself?
Frenchy: Hand over those pants!
Boris: Oh but little Frenchy, I can't. It's undignified. Think of my position. I've met every king in Europe.
Frenchy: Now you met two Aces in Bottleneck. Off with those pants.

Dimsdale is embarrassed and mortified by his new assistant's first impression of weakness:

Dimsdale: Everybody's laughin' at ya. Tom, you made an impression on this town that's got to be eradicated right now.
Destry: Oh now, Wash, don't you think them first impressions are darn fool things to jump at, though?
Dimsdale: Around here, you gotta jump first or you don't live long.

Destry shrugs and tells a homespun story about how first impressions are foolish to judge a person by. As they walk inside the saloon, Boris flees in his long johns after being humiliated in the card game. Dimsdale introduces Tom to Kent, Slade, and to Frenchy: "the real boss of Bottleneck." She looks up at the tall lanky deputy and makes a cliched reaction: "How's the weather up there?" He retorts smartly: "You can do better than that." Kent approaches to assert his dominance and provoke a fight by demanding his gun, and is baffled that the soft-spoken wimp doesn't even like to wear a gun. Destry is also teased for ordering milk at the bar:

Kent: Mr. Destry, before we start drinking, I think you and me oughta come to an understanding.
Tom: Well, I'm all for folks understandin' each other. That's a mighty fine idea, Mr. Kent.
Kent: I'm glad you agree with me. So I'll start by telling you that I have a very peculiar hobby.
Tom: So have I. Mine's carvin' napkin rings. What's yours?
Kent: Mine's collectin' deputy sheriff's guns. (The saloon empties out) Whenever I meet a new deputy, I always ask him for his gun. And I ask 'em real nice.
Tom: Well, I'm sorry Mr. Kent, I'm afraid this here's one gun your collection's gonna be minus.
Kent: You mean I'm gonna have to take it?
Tom: If you can. Now hold on, hold on. Don't get excited here. I was just tryin' to tell ya that I ain't got any guns. You see, if I would have had a gun there, why, one of us might have got hurt - and it might have been me. I wouldn't like that, would I? (Kent laughs with amusement)
Bugs: Tweet, tweet. I'm a canary. Where's my cage?
Gyp: It's gettin' sunny. Where's my parasol?
Kent: Folks - seems like we got a deputy that knows what's good for him. If he don't carry a gun, he can't get into any trouble. And if anybody comes to you, you come to Uncle.
Tom: I'll remember that, Mr. Kent.
Kent: What'll you have, deputy? (They turn and face the bar)
Loupgerou: Milk?
Tom: Yeah, I think I will.

To challenge and mock him even further in front of the laughing crowd, Frenchy hands Tom a broom and a wooden bucket full of water with the comment that he can use those things to clean up Bottleneck: "I can see now how you cleaned up Tombstone. You can start right here - and don't forget the corners." While everyone is still laughing at Destry's gentle ways, angry wife Lily Belle Callahan storms her way in. In contrast to Destry, she is upset that her Russian "lummox" of a husband has lost his trousers to Frenchy in a poker card game and accuses Frenchy of cheating:

Lily Belle: Hey you, give me those pants. (She grabs them from Frenchy.) And from now on, you leave my husband alone!
Frenchy: I don't want your husband, Mrs. Callahan. All I want is his money - and his pants.
Lily Belle: And how did you get 'em? By makin' eyes at him while you cheat? You gilded-lily you!
Frenchy: (insultingly and tauntingly) But Mrs. Callahan, you know that he would rather be cheated by me than married to you.
Lily Belle: What did you say?
Frenchy: You heard me.
Lily Belle: That's what I thought you said.

They engage in the roughest female catfight in film history. The unladylike, wild, free-for-all western brawl in the saloon (choreographed without stunt stand-ins) lasts almost two minutes, and includes scuffling, hair-pulling, dress-tearing, punching, wrestling, scratching, kicking and rolling on the floor. Peace-maker Destry breaks (or cleans) it up and cools off their heated argument by pouring a bucket of water on them. Feeling publically humiliated by him, Frenchy vengefully continues the fight with Destry, punching, kicking and clawing at him, then grabbing a six-shooter to aim at him. Everyone in the saloon stampedes for the exit. Further, when she tosses bar glasses, steins and bottles at him, he calls "Uncle" for Kent to rescue him, or ducks behind a raised chair. Hot-tempered, she rides on his shoulders as if he was a bucking bronco. He pleads with the furious saloon queen for reason (and law and order): "Hey, can't we talk this over?...Now wait a minute, lady." As he escapes one flying object after another and backs out from the wrecked saloon, he narrowly avoids being hit with another chair by ducking. He tells her that his 'welcome' at Bottleneck hasn't been exactly friendly: "You sure have a knack of makin' a stranger feel right at home, ma'am. Nice knowin' ya."

Excitedly frustrated and distressed, Dimsdale is dubious about his appointment of the placid Destry to be his deputy and berates his impotent assistant: "I never thought I'd live to see the day that Tom Destry's son would be the laughing-stock of the whole town....Why, you won't be able to stick your nose out of a door without everybody a-hootin' at ya." He threatens to fire Destry: "You're leavin' on the next coach." The sheriff asks: "How ya gonna face anybody after what you took from Kent and Frenchy?...I expected you to be like your Pa, comin' up blastin' behind shootin' irons. And what happened? You didn't have any. Why?" With conviction, Destry talks about restoring order to the town in a new way - without guns. Philosophically, he believes that guns are not the answer to end lawlessness - his father was gunned down in Tombstone in the back even when armed with his weapons. Tom is resolved to stay and persuades the dubious Sheriff to swear him in as deputy and give him a badge:

Tom: Didn't seem to do him much good, did they? That's one reason I don't believe in them.
Wash: What in tarnation do you believe in?
Tom: Law and order.
Wash: Without guns?
Tom: (resolutely) Without 'em!
Wash: (In a characteristic gesture of exasperation, he pulls up the front of his shirt, leaving the shirt-tails hanging out.) Well, if that don't beat all, let go. Oh Tom, the reason they made me sheriff here is because I was the town drunk. They wanted someone they could kick around, someone who wouldn't ask questions. But I was aimin' to fool 'em, do things right, sendin' for you. And now, you fooled me.
Tom: Well, you will fool 'em, Wash. We'll fool 'em together.
Wash: The only way to do that is fill 'em full of lead.
Tom: No, no, no, what for? You shoot it out with 'em and for some reason or other, I don't know why, they get to look like heroes. But you put 'em behind bars and they look little and cheap, the way they oughta look. And that serves as a warnin' for the rest of 'em to keep away.
Wash: Oh that won't work here in Bottleneck. You go on home and I'll go back to bein' the town drunk. That's all I'm good for.
Tom: Now you're not goin' back to bein' the town drunk and I'm gonna stay here and do this job I come for. My pa did it the old way and I'm gonna do it a new way. And if I don't prove to you that I'm right, I'll get out of town quick enough, don't worry. (Understandingly, he tucks the shirt-front back into Wash's pants.) But first you got to give me a chance, Wash. You've got to give me a chance on this thing...Now come on, come on, swear me in, Sheriff.

The Sheriff presents Tom with a deputy's badge, cautioning: "Don't let anybody see it." Kent and his men surround Claggett's farm, forcibly attempting with gunfire to take what they had crookedly won. As the Sheriff makes his rounds with his deputy, he points out a blood-soaked, bullet-holed porch post with a tale of the Wild West to encourage his assistant to carry a gun or leave town. Unimpressed by the monument or the reasoning of the story, a laconic Tom stubbornly responds with one of his own folksy, pedagogical anecdotes/stories which compares himself to a stamp:

Wash: Look at this post. Soaked through and through with the blood of Saw-tooth Magee. Yeah, he objected to a petticoat a neighbor's wife was wearing and they fit to a draw. Both buried in the same grave.
Tom: It's all due to the petticoat.
Wash: No, Saw-tooth and the neighbor and four innocent bystanders. You gotta listen to reason or get out of town.
Tom: Aw, I think I'll stick around. You know, I had a friend once who used to collect postage stamps. He always said the one good thing about a postage stamp - it always sticks to one thing 'til it gets there, you know. I'm sort of like that too.

Rowdy, "playful" cowboys ride through town shooting their pistols into the air. "No-gun Destry" quietly confronts the men with his drawl and borrows one set of guns from them: "Aside from being nice ornaments, a fellow can have a whole lot of harmless amusement out of these here toys." To their astonishment during spectacular target practice, the 'castrated' westerner demonstrates his dazzling six-shooter skills by shooting ornamental knobs off a distant storefront street sign - and then authoritatively confiscates the weapons from the over-awed reveller (Harry Cording): "Now the next time you fellows start any of this here promiscuous shootin' around the streets, you're gonna land in jail - do you understand?"

Destry questions the mysterious disappearance of the late Sheriff Keogh: "He forgets his rabbits, he forgets all these papers." In the meantime, they are alerted by young son Eli Whitney Claggett (Dickie Jones) that the Claggett farm family is under siege from Kent and his gang. At the ranch, Claggett affirms that Kent's claims to their hard-earned farm are unfounded, due to Frenchy's involvement: "But I told you what that woman did to me. The game was as crooked as a hog's tail." Initially, Sheriff Keogh tried to uphold the law, according to Dimsdale: "He couldn't do nothin' about it. Everybody knows that he left town sudden." Destry insists that the piece of paper that deeds Claggett's property to Kent must be respected. But his next strategy is to visit Frenchy and "get better acquainted with the enemy...it's poker and coffee that's preying on my mind right now."

On "official business" later that afternoon at Frenchy's home, Destry is introduced as "the waterman" to Frenchy on a visit to "get neighborly." In an amiable, subtle confrontation, he first apologizes "for not knowin' who's the real boss of Bottleneck," and then insinuates that her reputation as a chanteuse is tarnished by rumors - while they are served coffee for breakfast:

Destry: Of course, I could have come bargin' in here with all sorts of remarks, like a couple of rumors I just heard about you. That you not only sing down at that saloon but you also take part in crooked poker games - cheatin' folks out of their ranches.
Frenchy: Who said that?
Destry: Oh, it was just a rumor, of course. It ain't true. Well, anybody with half an eye could see that you wouldn't be part of any action like that. (Clara serves coffee to him.) I'll take that - I wouldn't want to have this coffee spilled in my lap, would I?
Frenchy: Just what are you getting at?
Destry: Well, when you have hot coffee spilled in your lap, you sort of get up quick and turn your back, and you don't know what's gonna happen, do ya?

Enraged, she throws him out - they have a severe shouting match as he departs. He pretends to be naive, eliciting from her the fact that Keogh was 'taken care of.' He startles her at the door when he suggests that her excessive makeup may hide real loveliness under her tough facade:

Destry: I've seen hundreds like you all the way from Jacksonville to Sacramento. And you all think easy pickin's will last forever.
Frenchy: You'd better mind your own business or you're heading for trouble.
Destry: Trouble is my business.
Frenchy: Well, you'll have plenty from me. I do as I like in this town - understand? (She trips.) And anyone who gets in my way is taken care of.
Destry: Like they took care of Keogh?
Frenchy: Yes, just like that.
Destry: That's what I thought.
Frenchy: What do you think you're going to do?
Destry: Don't get scared.
Frenchy: I'm not scared of anything, and you keep your mouth shut and get out of town before it's too late for you.
Destry: Oh now come on, I don't think you're half as bad as you make out to be.
Frenchy: Never mind what I am.
Destry: I'll bet you've got kind of a lovely face under all that paint, huh? Why don't you wipe it off someday and have a good look - and figure out how you can live up to it.

After he leaves, she touches her face as if feeling it for the first time, looks into a wall mirror, and reflects on what he has just told her. She wipes the lipstick from her mouth with the back of her hand, and then cleans it with her feather boa. As the scene dissolves, a connection is established between Frenchy and the newly-arrived Janice, who is also looking in a mirror and applying makeup with a new chamois skin - a novel method that other towns-ladies are eager to try:

It's one of the new chamois skins. It takes the shine off your nose.

The ladies are also curious about her opinion of Destry: "Oh I know little about him. Apparently very nice and certainly different from the rest of the men you meet out in this country." The bartender, who is boarding in Mrs. Callahan's place, interrupts and calls to his landlady from a doorway where he has modestly wrapped himself in a curtain - Boris has robbed him of his pants:

Prunes every day for breakfast I don't mind. Torn sheets I've got used to. But pants I cannot swallow...Pants, mine are gone!

With a menacing shot-gun, Lily Belle catches her husband fleeing out of one of the boarding house windows, wearing the bartender's oversized pants: "You misfit Cossack you - take off them pants!" The unlucky gambler pleads with her: "All I want to do is to be a cowboy and wear my own pants." She returns the pants to a demure Loupgerou as a commotion from outside brings everyone to the street.

The dispossessed Claggetts have moved into town, displaced by Kent's villany and Destry's reinforcement. Cattleman Jack Tyndall agrees with their assessment of the corrupt saloon owner: "That man Kent's got ahold of every ranch in the valley and he wants to charge two bits for every head of cattle going through." Fiesty Lily Belle is fed up with talk: "It's time the decent people of this town joined up and got rid of them hoodlums." Contemptuous, Tyndall is frustrated with the ineffectual Sheriff and deputy who won't use their fists or guns:

Well, you'd better start in with that watery-eyed Sheriff and that gun-shy, lady-fingered Deputy of his...I ain't one of your weak-livered citizens that busts out cryin' every time you snap your fingers and I ain't gonna pay Kent's fancy prices....I'll get somethin' done about it if I have to take the law in my own hands.

Finally, Destry stands up against taking the law into one's own hands, with another yarn:

Nobody's gonna set themselves up above the law around here. You understand? I've got somethin' to say to you. I think maybe I can illustrate it a little better if I told you a story. I used to have a friend that was an Opry singer. But he went into the cement business. And one day, he fell into the cement. And now he's the cornerstone of the post office in St. Louis, Missouri. He should have stuck to his own trade. You'd better stick to yours.