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In 1979, a man named Thomas drives his truck into Dampier, Western Australia late one night, having transported a previously ordered statue of William Dampier to the town. Upon entering the town pub he sees the silhouettes of a group of men, one of whom is holding a gun. Believing it is a murder, he rushes into the next room trying to stop them, when he sees that the men are trying to put down an apparently sick dog. Unable to bring themselves to carry out the euthanasia, the men, with Thomas, retreat to the bar.

Publican Jack Collins tells him the dog's name is Red Dog and narrates his story. Upon arriving in Dampier in 1971, the dog befriends many of the employees of Hamersley Iron, who have a major iron ore excavation in progress. Various miners relate their stories of Red Dog to Thomas, but state that, while Red Dog was a dog for everyone, he had no real master.

The men then tell of an American, John Grant, a bus driver for Hamersley Iron who became Red's master. He eventually starts dating a woman named Nancy, a secretary at Hamersley Iron. After living in Dampier for two years, John proposes to Nancy. On the night of the engagement, John tells Red Dog to stay until he returns from Nancy's caravan. Early the next morning, John rides his motorcycle from Nancy's caravan, but he is killed in an accident on the way after hitting a kangaroo.