Sherlock meets Dr. Mortimer, and Dr. Mortimer shares the legend of The Hound of the Baskervilles. Then Moritmer explains that the only heir to the throne is Sir Henry Baskervilles, and he is on the throne because Sir Charles died. The next morning
after Sir Charles death, Dr. Mortimer and Sir Henry go to Baker Street where Sherlock and Watson live. Sir Henry tells Sherlock that he received and hand written letter, but he didn't tell anyone what hotel he was staying at. After Sherlock examines the letter he realizes that the letters come out of Times magazine.
Sherlock the requires Watson to accompany Sir Henry everywhere he goes, and to never let him out of his sight. When Watson arrives Dr. Mortimer leaves and the pair meet Barrymore, the butler, and they settle in for a good nights rest; but when Watson was just about asleep he hears a woman sob down the hall.
Now after Watson deals with the sound he heard, he switches his attention back to Sherlock. Watson tells Sherlock how Barrymore, the butler, plans to escape to South America. Once he's out of the country he will never return and will never be a danger to the people of England again.
After he leaves, Watson goes to visit Laura Lyons. She admits to writing the letter to Sir Charles asking him to meet before his departure. So that makes her a suspect in his death. She asked his for financial help because of her divorce, but she never went to Baskerville Hall.
In the end Sherlock kills the hound that killed Sir Charles, it turned out to be a blood-hound mastiff. It had phosphorus around its eyes and that made its mouth glow. When that is over Sherlock and Watson go watch a movie and relax.