Dances with Wolves begins in 1863. Lieutenant John J Dunbar lies on surgeon’s table from a wounded leg he received during an American Civil War battle. The surgeon wants to amputate Dunbar’s leg. However, Dunbar would rather die than lose his leg.
He takes a horse and rides up to and alongside the Confederates front lines, daring them to end his life. Dunbar’s distraction allows the Union soldiers to overtake the Confederate sentry lines. They get the upper hand in the Civil War stalemate. The union general finds Dunbar’s nearly unconscious body, sans any new bullet holes, and calls for his personal doctor. He saves Dunbar’s leg, and decorates Dunbar for bravery that helped win the day for the Union. Dunbar decides his next assignment is on the western frontier “before it is gone.”
Next, we see Dunbar riding up to Fort Hays, a large fort on the edge of the frontier. Dunbar reports to commanding officer, who is a mentally ill and suicidal major. He sends Dunbar to the army’s furthest post, Fort Sedgwick. Dunbar travels to Sedgwick with the flatulent Timmons, the man commissioned to supply the Fort with his mule wagon. The duo travel to Sedgwick only to find it deserted and in extremely poor condition. Dunbar decides to stay alone at the fort and orders Timmons at gun point to unload the fort’s provisions.
After Timmons leaves, Dunbar begins to repair and rebuild the fort. Meanwhile, Pawnee Indians scalp Timmons on his way back to Fort Hays; eliminating the knowledge that Dunbar is at the fort.
Back at the fort, Dunbar maintains the post, and Sioux Indians visit him; more for his horse than for him. Attempting to put on a good impression, Dunbar goes to seek out the Sioux camp itself. While scouting, he encounters what he believes is an Indian female under a tree attempting suicide. Shockingly, Dunbar discovers the female is a white woman with the name Stands With A Fist. Dunbar takes the wounded woman back to the Sioux camp, which garners him respect with many in the tribe. Chief Ten Bears and the tribe’s medicine man, Kicking Bird, engage in a dialogue with Dunbar rather than kill him. They hope to learn more about the encroaching white men.
Dunbar establishes a rapport with Kicking Bird and the warrior, Wind In His Hair. Eventually, the Sioux allow him to visit their camp. However, the language barrier frustrates Kicking Bird and Dunbar. So, the medicine man enlists Stands With A Fist to act as an interpreter. With the assistance of the Sioux widow, the pair finally are able to exchange in a fruitful dialogue.
Dunbar discovers that his knowledge of Native Americans is categorically untrue. He begins to develop a respect and appreciation for the Sioux lifestyle and customs. Dunbar learns the Sioux language, and they accept him as an honored guest by the Sioux. He tells them of a migrating herd of buffalo, and they all participate in a hunt which feeds the tribe for many months.
In addition to befriending the Sioux, Dunbar also befriends a wolf that he playfully names Two Socks for its white forepaws. When the Sioux see Dunbar chasing Two Socks on the plain one day, they give him the name Dances With Wolves.
Dunbar begins a romantic relationship with Stands With A Fist, which the tribe accepts since they are both white. The couple eventually marry, and Dunbar abandons his post at Fort Sedgwick and begins living fulltime with the Sioux.
While living with the Sioux, the tribe faces a threat from the hostile Pawnee. The warriors, including Kicking Bird and Wind In His Hair, form a war party to attack the Pawnee, leaving Dunbar and a handful of men to protect the women and children of the tribe. When the Pawnee approach the barely protected camp, Dunbar retrieves the rifles from Fort Sedgwick to give the Sioux an advantage over Pawnee. The Pawnee attack, but the Sioux easily defeat the over powered attackers with their superior fire power.
After the successful defense of the camp, Chief Ten Bears decides to move the tribe to its winter camp because of the growing Pawnee and the encroaching threat of the white army. Dunbar decides to accompany his adoptive tribe, but realizes that his journal, which he left at Fort Sedgwick, will act as a map for the Union army to find the Sioux. The former soldier heads back to the fort to find it reoccupied by the U.S. Army.
The occupying soldiers believe Dunbar is an Indian due to his Sioux clothing and open fire, killing Dunbar’s horse, Cisco. They arrest him, and charge him as a traitor when he refuses to help the army hunt down the Sioux people.
While the military transports Dunbar back East for trial, Dunbar’s Sioux brothers kill his captors. Once again reunited with Stands With A Fist, Dunbar realizes that the U.S. Army will now use him as an excuse to find and either imprison or kill all Native Americans. Dunbar announces his intent to leave the tribe in order to try to convince the government to not slaughter and destroy the Sioux way of life.
His fellow tribesman attempt to convince him to stay by stating that the man that he once was is no longer, and now only Dances With Wolves exists. However, Dunbar knows that is not true. The film ends with the approaching U.S. Army coming to the Sioux winter camp, only to find it deserted. Meanwhile, Dances With Wolves and Stands With A Fist ride through the snow to an uncertain, but likely dark future where the Sioux Indian way of life is no more.