Neighborhood gang leader Marty Dillman was first seen when, after being stabbed in a rumble, he was taken to Cedars Hospital and treated by Dr. Ed Bauer. If not for Ed Bauer's surgical ability, Marty probably would have died. At Cedars, Marty met young Peggy Scott, who was starting her nursing career. Peggy soon became attracted to Marty and learned that he wasn't a stereotypical gang leader. Marty was an unprincipled, thrill-seeking rich boy who had been spoiled rotten by his widowed mother, Claudia. Innocent Peggy Scott, who had recently ended her relationship with Johnny Fletcher, was immediately charmed by Marty‘s superficial intelligence and artificial wit. Soon, though, things would go awry in this budding romance. Flip Malone, a sleazy garage attendant who was a crony of Marty's, had recognized the dubious Tracy Delmar as Charlotte Waring --and not Dr. Sara McIntyre's long lost niece as she claimed to be. This was shortly after Tracy and Peggy's former flame, Johnny,announced their engagement. When Flip told Marty about Tracy's true identity, Marty blackmailed Tracy for big bucks and split the take with Flip. Keeping her secret, Tracy married Johnny. Meanwhile, Marty was not pleased to learn that Peggy was pregnant with his child and he married her reluctantly. Both marriages were mercifully short lived.

One day, Peggy overheard a conversation between Marty and Tracy and wrongly suspected that they were having an affair. Distraught,and weak from her pregnancy, Peggy blacked out. When she came to, Marty had vanished! He was later found near a lake, with a fractured skull and a knife wound to his neck. The police booked Peggy for Marty's murder, and she went on trial with Mike Bauer as her attorney, Mike arranged for Peggy to leave jail temporarily and go to Cedars for the birth of her son, whom she named William Bauer Dillman. With Marty dead and Peggy's life in shambles, Tracy finally revealed her true identity as Charlotte Waring and confessed that she'd been after Sara's money. Sara bitterly wrote the girl off, and Johnny annulled their charade of a marriage. Charlotte was determined to redeem herself. Sharing Mike's suspicion that Flip was Marty's real killer, Charlotte began dating the grease monkey in order to obtain the necessary proof. One night, Flip drunkenly revealed to Charlotte that Marty had planned to double-cross him in their blackmail scheme and skip town. He showed her the airplane ticket Marty had intended to use. Guessing correctly that Flip had snuffed out Marty, Charlotte waited until Flip was asleep, then sneaked out with the ticket and turned it over to Mike. Later, when Mike was grilling Flip on the witness stand, the shrewd lawyer produced the plane ticket and introduced it as evidence. Cornered, Flip confessed to the brutal murder of Marty Dillman and was imprisoned.