When a group of boys accidentally stumbles on Gisborne's weapons-testing site, all but one is taken prisoner. The resourceful escapee, Daniel, is able to elude Gisborne's men and runs to Robin to raise the alarm. Robin is horrified to discover that Gisborne has developed an indestructible new suit of armour, made of special Damascus steel an army wearing this armour would easily defeat King Richard and must be stopped.
Gisborne has taken the boys back to Locksley Manor where the Sheriff orders that they be hanged. Luckily, Robin and his gang arrive in the nick of time. What's more, Robin cleverly steals the black diamonds used to create the Damascus steel. But disaster strikes and Daniel is captured during the scramble.
The Sheriff immediately demands an exchange Robin can have Daniel back if he hands over the black diamond. Robin and the gang decide that they will hand over the diamond in a box lined with pitch, then set light to the diamond's box with a flaming arrow and melt the rocks.
Marian learns of Daniel's capture and puts a plan into action. Feigning interest in seeing Gisborne, she requests a night pass from the Sheriff and inobtrusively slips in a second paper -- a release for Daniel -- which is also affixed with the Sheriff's seal. Marian runs her plan past Robin as she needs one of the outlaws to pose as a guard and take Daniel. To everyone's surprise, Allan volunteers, but he only sees it as a brilliant opportunity to leak Robin's plan to Gisborne. Meanwhile, Marian's visit to Gisborne at Locksley seems to turn into a genuine intimate moment between the two as Marian walks in and is flustered by the sight of a half-naked Gisborne being fitted for his armor. She says that there is bad blood between them and that she wants a reconciliation and would like to offer him "friendship." Gisborne seems skeptical, suspecting that she simply wants her freedom back which he cannot give her; he also says that he no longer has feelings for her and is now interested only in position and power. Nonetheless, he takes her hand and touches her face in a tender manner that sparks some jealousy from Robin, who is watching through the window.
Allan intentionally fails at rescuing Daniel and also leaks Robin's plan to Gisborne. Robin and the Sheriff meet, ready for the exchange. The Sheriff demands that Robin takes part, otherwise, the archers will shoot him. Robin agrees. Marian takes the boy, saying he cannot be released into an outlaw's custodys. Robin hands over the box -- but since the Sheriff has been warned about the plan, he removes the rocks and places them into a satchel. He then tells a concealed Gisborne that Robin is all his. Gisborne emerges in his indestructible armour. Dodging his attacks, Robin finds a bucket of pitch and throws it at Gisborne, then lights an arrow and shoots it, setting Gisborne's armour alight. Gisborne climbs into a water container to extinguish the flames; Robin follows him, removes his helmet and holds Gisborne at swordpoint, then offers the Sheriff another deal: Gisborne's life for the black diamonds. The Sheriff downplays Gisborne's importance to him as Robin starts dunking Gisborne and holding his head under the water. Marian uses a dagger to threaten the blacksmith (the only one who knows how to make the steel), demanding the Sheriff let Guy live; the blacksmith tells the Sheriff he will get more rocks, and the Sheriff throws the rocks to Robin, who destroys them in the fire.
As Gisborne takes off the armour, Marian approaches; he thanks her for saving his life but points out that she also helped Robin, which she claims was incidental. He tells her that he has been assumed she has had nothing to do with Robin Hood since he became an outlaw, which she confirms, and warns her that otherwise, the punishment is death.
Meanwhile, the blacksmith leaves, saying that he is going to France because he cannot work under these conditions. The Sheriff takes his anger out on Marian. She tells him that she only did what she did because Guy is his loyal servant and she wanted to stop him from making a mistake. He tells her she will be punished and her father will be the one to bear the punishment.
The episode ends with Robin Hood giving the four boys the wooden tags that signify that they are part of Robin Hood's gang. They all call out: "We Are Robin Hood."