Holmes gets in trouble with his landlady Mrs. Hudson for not paying his rent. Holmes' friend, Dr. Stamford, suggests Holmes get a flatmate and sends Dr. John Watson, whom Holmes deduces is a retired army doctor. Mrs. Hudson is impressed enough to allow Watson to become Holmes' flatmate. Inspector Lestrade of Scotland Yard arrives and arrests Holmes for suspicion of murdering Count Drebber who had written Holmes name in his own blood before he died. Assistant Inspector Gregson, who despises Holmes, collects evidence despite Holmes pointing out that it could easily be faked...