Guy of Gisbourne, along with a patrol of the Sheriff's men, is out in Locksley demanding money with menace and a harder line than ever before. Guy discovers Luke the Cooper has manufactured bows and weapons to a Saracen design- showing Luke was working for Robin Hood. Luke is taken prisoner, as is Little John's son (also named John) who tries to protect him.
Robin and Little John witness this. In dismay that his son has been arrested, John strikes out on his own to rescue the pair, only to be captured and taken to the dungeons himself. During the fight, he loses his two tags which identify him as one of Robin Hood's men. Robin and Alan-a-Dale disguise themselves as castle guards and take Will as a pretend prisoner to gain access to the dungeons and Little John. However, their plan is thwarted when they discover the dungeons are full and Will has to be left outside. Little John, however, has met and befriended Luke and John. Alice, his wife, is later thrown into the dungeons too and Little John reveals he is the father of John.
Marian reveals to Robin that the tax money leaves for London, with Guy of Gisborne guarding it. Robin plans to exchange the money for sacks of grain. Gisbourne leaves with the cart, only to discover the switch soon after leaving the castle gates.
Meanwhile the Sheriff has plans for all the prisoners who have not paid their taxes - they are to be a deterrent to other non-payers in his 'Festival of Pain', in which the Littles are to be the star act. He plans to torture the prisoners in front of important local nobles, but Robin comes in just as he is about to begin. He had given a lock pick received from Marian to Will earlier on, and he has picked open all their chains. They escape, leaving the Sheriff upside-down in one of his torture machines.
Luke, Alice and John Jr leave to start a new life elsewhere. Robin gives Little John his tag back but there is only one and he looks up to hear John Jr yelling from the cart "I will never forget that my father is a comrade of Robin Hood" whilst dangling the other tag on a string in front of him.