The Real Inspector Hound follows the story of two theater critics, Moon and Birdboot, as they attend a play in London. Simultaneously, we trace the narrative arc of the theater critics and the narrative arc of the murder mystery play that they are assigned to review. So, it is a play-within-a-play. By the end of the play, the two narratives become entangled and are nearly impossible to separate.
Moon is a second-string theater critic with a deep desire to become first-string. Birdboot, on the other hand, is already well-known for his work. Although they are not equals in their field, they both struggle quite a bit with personal grievances. Moon fears that his whole existence is defined by Higgs, the first-string theater critic. Birdboot’s fear, on the other hand, is that he has become better known for cheating on his wife than for producing great work. The evening prior, for example, he had a rendezvous with one of the actresses in the play. He tries to deny accusations of philandering, but as the play begins, he can’t resist falling for yet another actress on stage.
The murder mystery — the play-within-a-play — is set at Muldoon Manor, a typical setting for the detective genre. Nearby the Manor, a madman is on the loose. With a storm on the horizon, the police — led by Inspector Hound — cannot get to the Manor. Unbeknownst to the residents of the Manor, there is a dead body sprawled out across the floor of the drawing room.
Early in the play, a man named Simon Gascoyne arrives at the Manor. Like Birdboot offstage, he is involved in multiple affairs. He is in love with Cynthia Muldoon, the owner of Muldoon Manor, but also had a recent rendezvous with Felicity Cunningham, Cynthia’s best friend who happens to be at the Manor when Simon arrives. Also at the Manor is Mrs. Drudge (the maid), and Magnus Muldoon, the half-brother of Cynthia’s long-lost husband, Albert.
Over a game of cards, the residents fight about their romantic engagements and speculate about the identity of the madman. Simon is a primary suspect, although every resident seems to threaten to kill another, with the exception of Mrs. Drudge.
Eventually, Inspector Hound arrives and together they discover the dead body on the floor. Hound claims that it is Albert, Cynthia’s long-lost husband, but Cynthia denies it, bringing into question the reliability of Hound’s information. As they scatter about Muldoon Manor to investigate, Simon is shot to death. His death presents another mystery: who killed Simon and why? This concludes the first act of the play.
Between acts, Moon and Birdboot continue their soliloquies from their seats in the audience. Then a telephone onstage rings, and Moon, on an impulse, hops on-stage to pick it up. It turns out to be Myrtle, Birdboot’s wife, calling to accuse Birdboot of philandering. Just as Birdboot hangs up the phone, the play’s first scene restarts, with Birdboot standing in as Simon Gascoyne. The characters repeat their lines as before, but Birdboot responds as himself. Like Simon, Birdboot is eventually shot to death, but not before realizing that the original dead body on the ground is none other than Higgs, the first-string critic that Moon is standing in for.
When Birdboot dies, Moon jumps onstage. Suddenly, he finds himself playing the role of Inspector Hound. When he tries to return to his seat in the audience, he finds that the critics' seats are filled by the original Simon and Hound. The play continues, with Moon/Hound trying to solve multiple layers of crimes (the deaths of Higgs and Birdboot on one level of reality, and the deaths of an unknown man and Simon within the play). Eventually, Magnus reveals himself to have multiple identities. He is Albert (Cynthia’s long-lost husband) as well as the real Inspector Hound. And Hound (played by Moon) is actually the madman, masquerading as Inspector Hound.
Moon realizes that the man playing Magnus is none other than Puckeridge, the critic who is third in command after Higgs and Moon. The whole play has been a scheme to kill off Higgs and Moon so that he could rise from third- to first-string. So even though Magnus/Puckeridge brings justice to the madman in the play-within-a-play, at another level of reality (outside the play-within-a-play), he is actually a murderer on the loose. Magnus/Puckeridge shoots Moon, and Moon falls to his death, saying, “Puckeridge, you cunning bastard.”