Little Thunder was in charge at the time General Harney with his powerful force, came into the North River country. Little Thunder was not anxious to fight, and wished to parley. He had with him on the Blue, forty-one lodges of Brules (or Burnt Thighs), and eleven lodges of Ogallalas, (or Dust Throwers). According to regular count this would indicate 326 Brules, of which 65 were braves, and 88 Ogallalas, of which seventeen would be braves. Harney had 1200 troops, infantry, cavalry and some artillery.

General Harney stationed his main force under Major Cady in the low, sandy hills near the lower end of the Blue Water valley, and engaged the Indians in a sort of parley, while the cavalry under St. George Cooke, were to go up the valley and behind the Indians in the darkness. The parleying did not close until after night fall, and was to be resumed the following day. The cavalry proceeded up the east side of the Blue, across some marshes, that are now a part of the hay meadow of S. P. DeLatour, and crossing the river two or three miles farther up, proceeded some distance too far to the west. It was not intended that the Indians should be allowed to escape, and he was returning to the proper position when a squaw, who was out picketing a pony for her brave who was belated in arriving in camp that night, heard the sound of the creaking saddles in the darkness and gave the alarm. The Ogalallas rushed out of their tents and the cavalary charged. The Indians fought desperately, and reached the top of the flat top butte that stands on the west side of the valley. Here they made a stand until dawn, but being driven therefrom they retreated across the small tributary of Blue Water, then called Beaver creek.