Later that night after the Christmas party, in their bedroom (with separate beds), Nick was still adamant about not taking the murder case. He didn't want to end his retirement, but Nora again requested that he get involved. Then, she asked about Christmas gifts he had for her:

Nora: What are you going to give me? I hope I don't like it.
Nick: Well, you'll have to keep 'em anyway. 'Cause the man at the Aquarium said that he wouldn't take them back.

Knocking was heard at their door. Nora let a stranger into their hotel room, and unexpectedly, he walked uninvited into their bedroom while wielding a gun. He demanded that Nick assist him: "I gotta talk to ya. I want ya to tell me somethin', I want you to give it to me straight. Get me?" Nick responded to the gunman:

Hey, would you mind putting that gun away. My wife doesn't care, but I'm a very timid fellow...All right, shoot. I mean, uh, what's on your mind?

The thug - identified as Joe Morelli, one of Julia's romantic partners, feared that he had been set up to be the prime suspect for Julia's murder:

I'm Joe Morelli (Edward Brophy)...I didn't knock Julia off...I ain't seen her in about three months. We was all washed up...I wouldn't have any reason to hurt her. She was always on the up and up with me, but that dirty little Nunheim - he got sore with her because I clicked and he didn't. And he put the finger on me.

Nick tried to convince Morelli that he wasn't a suspect in the case, and that he should go talk to the police to clear his name.

When police banged on the door, the criminal reacted nervously and drew his gun. Nick knocked Nora out with a solid punch to her jaw to get her out of the way of the assailant's line of fire, and then tossed a pillow into the gunman's face. The detective narrowly escaped serious injury with only a slight flesh wound. The police barged in and assisted him in subduing the gunman. After being revived with a drink, Nora complained about having missed the action while unconscious, with little care for Nick's injury:

Nora: You darn fool, you didn't have to knock me out. I knew you'd take him, but I wanted to see you do it.
Nick (laughing): There's a girl with hair on her chest.

The police harrassed Nick with questions, but he didn't offer clear answers. When the plainclothes cop found an unregistered pistol [the one Dorothy falsely claimed to have used to kill Julia] in his dresser drawer (after Nora had shouted: "What's that man doing in my drawers?"), they promised to question him further the next morning when he felt better. During the whole incident, Asta had hidden under one of the beds. Nora quipped that Asta had more sense than her husband did.

The next morning, Christmas Day, Nick practiced shooting with a popgun/air pistol that he had received as a Christmas present. With Nora clad in fur and Nick wearing pajamas and a robe, he was stretched out on the sofa, with bent knees and the gun propped between his feet. The amateur sharpshooter irreverently took aim at the balloons hanging on their Christmas tree. He also tried a backwards shot by reflecting his target in a mirror, but missed and broke a window, and then thanked Nora for his present:

Ah, but sugar, this is the nicest Christmas present I've ever had.

On the front page of the morning paper, he read about the previous night's shooting in their bedroom:

Nick: ...I know as much about the murder as they do. Oh, I'm a hero. I was shot twice in the Tribune.
Nora: I read where you were shot five times in the tabloids.
Nick: It's not true. He didn't come anywhere near my tabloids.

Nora answered the telephone and announced that MacCaulay was on his way up to their room:

Nick asks: Aren't you hot in that? (Nora was wearing a full length mink coat indoors.)
Nora: Yes, I'm stifling. But it's so pretty.

Nora read a telegram they had received from Philadelphia, allegedly from Clyde Wynant: "Will you take charge of investigation on Julia Wolf murder? Communicate with Herbert MacCaulay." She believed the inventor wouldn't ask Nick to investigate if he was indeed guilty. She again asked her husband to take the case, but he responded negatively: "You take it. I'm too busy."

MacCaulay arrived and told them that he had heard from Wynant. After reading their telegram, he asked:

MacCaulay: What are the chances of getting you to do what he wants?
Nick: Slim.
MacCaulay: Would it help any if I could persuade him to meet you...
Nick: Might.
MacCaulay: He gave me a code message to insert in the Times in case I wanted to get in touch with him.

Just then, the police telephoned for MacCaulay, and he told them after hanging up:

Wynant's tried to commit suicide. They want me to go down and identify him. Well, I guess this changes the whole story, doesn't it? That looks like an admission of guilt. And I had such hopes. I thought if you got on the case, you'd be able to clear him.

When Asta played with a balloon - and it broke - Nora commiserated with her beloved pet:

Asta, is your balloon busted? So's mine.

Nora explained that she was disappointed that Nick wouldn't be able to solve the mystery, but then, he suddenly decided to take the case, with a hunch that Wynant wasn't the killer: "I'm going to find out. I'm tired of being pushed around. Come on, Dr. Watson, let's go places." He escorted her, holding her arm, as they walked off together.

Outside on the street, they talked to the police detective again who informed them that Wynant's suicide was untrue. He theorized how Wynant killed Julia:

Wynant went to Julia's apartment and found Morelli there. Sees she's two-timing him. There's a fight. He doesn't pull anything on account of Morelli. Let's his lawyer go ahead and give her money to give to him so that she'll think it's all blown over. Then, when she isn't expecting it, he let's her have it.

Nick let the police lieutenant know that Arthur Nunheim (Harold Huber), one of their stool pigeons, had been hanging around Julia [this was the information that he had learned from Morelli]. The lieutenant suggested going to question Nunheim.

In this same scene, Nora was walking Asta on a leash. Shot from the waist up, the leash was seen being jerked along in the direction of a passing fire hydrant and lamp-post. Nick told Nora that he was leaving with the detective to go and question Nunheim, by himself: "I think you better let us go alone." Nora counted herself into the case, threatening: "Catch me letting you go alone!" She quickly jumped into the cab that she thought they were entering. But her husband tricked her - he sent her off alone, by instructing the taxi cab driver to take her to Grant's Tomb (to keep her out of danger).

The two surprised Nunheim in his apartment with his girlfriend Marion (Gertrude Short). The lieutenant accused Nunheim of lying about his familiarity with Julia, and of running after Julia: "What's the idea of telling me you knew the Wolf girl just by sight?" Nunheim claimed his innocence, but his girlfriend mocked his answer - proving that he was lying. [Nunheim probably witnessed Julia's murder and knew who killed her.] He was asked about his whereabouts the afternoon that Julia was killed. Nunheim was reluctant to answer, and ducked out on them through the back bedroom and down a fire escape.

In the next scene, Nunheim was seen on the phone, blackmailing someone for $5,000 more to "play dumb" and leave town. While attempting to collect the money, Nunheim was killed by an unknown assailant. The same gun that killed Julia was used in Nunheim's murder. Nora called Nick at the police station from Mimi's place:

Nick: How'd you like Grant's Tomb?
Nora (snapping back): It's lovely. I'm having a copy made for you.

Nora told him that she had also done some detective work, and had found out that Chris Jorgensen, Mimi's new husband, had disappeared. Mimi defended Chris: "I tell you. He didn't do it...I'll tell them who did do it. And I'll give them proof." She handed over to the lieutenant her ex-husband's watch chain that she took from Julia's hand after the murder. The police lieutenant quickly concluded that Wynant was the murderer who had reasons to kill them:

Well, I guess that cinches it, eh, Charles? He killed them both, the Wolf girl and Nunheim.

Newspaper headlines read:

A $5,000 reward was offered for Wynant's whereabouts.

With their dog Asta, Nick prepared to leave and search Wynant's workshop for clues. He was suspicious because it was closed. Nora was now upset and pouting because Nick brought her to New York, but had taken on a dangerous assignment - nonetheless, at her urging:

Nora: I think it's a dirty trick to bring me all the way to New York just to make a widow of me.
Nick: You wouldn't be a widow long.
Nora: You bet I wouldn't.
Nick: Not with all your money.
Nora: Fool.
Nick: Well, any port in a storm. (She resisted a kiss from him) Good-bye, sugar!
Nora: (worried that he would get hurt) Nicky, Nicky... Take care of yourself.
Nick: (laughing) Why sure I will.
Nora: Don't say it like that! Say it as if you meant it.
Nick: Well, I do believe the little woman cares.
Nora: I don't care. It's just that I'm used to you, that's all.

They kissed and embraced. She threatened Asta if Nick was hurt: "If you let anything happen to him, you'll never wag that tail again."

As Nick searched Wynant's workshop with a flashlight, Asta sensed something under the floor with a sharp sense of smell. Nick complimented Asta: "Asta, you're not a terrier, you're a police dog." They discovered the remains of a body buried in the basement. When an intruder threatened, Nick shouted: "Don't make a move or that dog'll tear you to shreds!" But Asta cowered in the corner. Nick held a gun on the man and learned he was Wynant's bookkeeper, Tanner.

Tanner believed Wynant murdered Julia because she stole $50,000 worth of bonds. The bookkeeper feared Wynant was out to get him too. [Because Tanner embezzled some money, he was back late that night to fix the books, so he wouldn''t be the next target.] Shortly after, the police arrived to question Tanner. They determined that the body in the basement had been buried there for at least a few months, and was badly decomposed and unidentifiable. The lieutenant, however, made more quick assumptions about the body and how Wynant was involved. Nick didn't want to make any conclusions until he located Wynant.

Nick asked the coroner if he could look at the body himself. While examining the body's X-rays, Nick noticed an old shrapnel wound in the corpse's leg - a crucial clue necessary to solve all the murders.

New headlines continued to sensationalize Wynant as a serial murderer:

A large-scale, nation-wide manhunt was orchestrated to find Wynant. Nick was questioned about his progress in the case:

Reporter: Well, can't you tell us anything about the case?
Nick: Yes. It's putting me way behind in my drinking...
Reporter: What's your next step, Nick?
Nick: ...right back to California. We've got to go home and rest up from this vacation.
Nora: Back to California, uh?

He wondered about his wife's taste for murder: "My soul, woman, I give you three murders and you're still not satisfied." Nora wanted him to stay and find Wynant. Nick surprised her with the revelation:

I did find him...He was down in his shop. That was his body.

Nick explained that the body was not one of Wynant's victims but Wynant himself. The crucial clue: Wynant had shrapnel in his shin that used to bother him. The victim's body did too. Because he had been dead for a few months, Wynant couldn't be a murder suspect.

Nick wished to keep his information secret, and then had a brilliant idea. He would invite all the murder-suspects (some issued with police warrants) to a large, formal dinner party at his home. He suspected a large number of people, including:

• Lawyer MacCaulay
• Wynant's ex-wife Mimi
• Mimi's "slick gigolo husband" Chris Jorgensen
• Morelli
• Nunheim
• Nunheim's girlfriend
• Tanner, Wynant's bookkeeper

Wynant's daughter Dorothy, son Gilbert, Tommy, and others were invited, but not considered potential suspects. White-jacketed waiters at the dinner were actually undercover police in disguise.

After everyone was seated and Nick offered a toast, Nora complimented him on his party, with a sarcastic tone:

Nora: You give such charming parties, Mr. Charles.
Nick: Thank you, Mrs. Charles.

Nick offered some very important news: "Just this. Clyde Wynant did not kill Julia. He didn't kill Nunheim or anyone...I saw him last night." Mimi reported that she saw Wynant the night before too - a claim that she had difficulty substantiating. Nora was the hostess for the party and asked the waiter to serve the guests:

Waiter, will you serve the nuts? I mean, would you serve the guests the nuts? [She probably meant what she said in her first sentence.]

Nick accused Mimi of lying and then offered proof. He explained about Wynant's war leg wound, and how his body was hidden and buried in the basement so it would look as if he was a prime suspect. He told the invited guests: "The murderer is right in this room, sitting at this table." Step by step, he explained and unraveled the mystery, and analyzed each of the crimes.

• Julia was robbing Wynant, and splitting some of the money with Tanner. Wynant went after the person he thought was cheating and robbing him. That man killed Wynant.
  
  
• After the murder of Wynant, the murderer wired MacCaulay using Wynant's name, and told him to close up the inventor's shop. Then, he destroyed all of Wynant's clothes, but kept his watch chain. He made it look as if the clothes on the body in the basement looked like those of an old enemy of Wynant's.
  
  
• The murderer wrote letters to MacCaulay (and also telephoned him), signing Wynant's name, so payments would continue to be sent to Julia so that they could be split between them. Wynant's money was being embezzled with Julia's compliance.
  
  
• Julia was killed by her co-conspirator, afraid that she would betray him to Mimi as the murderer of Wynant. The murderer left Wynant's watch chain in Julia's dead hand.
  
  
• Then, the murderer killed Nunheim because he was a stool pigeon and knew too much. [Nunheim heard the shots and saw the murderer leave after killing Julia Wolf.] When Nunheim threatened blackmail a second time, he was murdered too.
  
  
• The only weak link - Wynant - had not been seen physically. The real murderer paid off Mimi with cash to say that she had seen Wynant alive. Mimi was the only one who knew the identity of the murderer. Mimi was led to believe that keeping Wynant "alive" would mean that she would continue to be paid off - a clear bribery/blackmail scheme.
  
  
• Wynant's lawyer, MacCaulay, drew up Wynant's will, to cut Mimi off if she remarried. But under the law, Mimi was never legally married to Chris Jorgensen. [Jorgensen's former wife admitted that she was still married to him, thereby making Jorgensen an unlawful bigamist.] Therefore, Mimi still remained as Wynant's rightful heir. Rather than continuing to receive a small amount of blackmail money from the murderer, Nick argued that she should reveal and incriminate the murderer - and be the rightful heir to Wynant's larger fortune.
  
  
• Nick forced the murderer - MacCaulay - to play his hand and threaten Mimi with a gun under the table.

After the mystery had been solved, Nora questioned Nick's tactics:

Nora: But Nicky, he might have killed you?
Nick: What's the matter? You sorry he didn't?
Nora: Oh, I'm glad you're not a detective.

He looked at her with open-mouthed astonishment.

In the final sequence on a westbound transcontinental train, Nick and Nora traveled back to California, sharing an adjacent cabin with newlyweds Dorothy and Tommy. They finally adjourned to their respective rooms late into the night. There were upper and lower bunks in Nick's and Nora's room. Nora asked that Nick put Asta in her lower bunk with her for the night. Nick laughed: "Oh, yeah?" tossed Asta up onto the top bunk, and joined Nora in the lower bunk. Asta covered his eyes with his paw.