Tom Van Allen/Danny Parker (Val Kilmer) being a junkie is all part of his plan to kill the two cops he's "working for". Those two cops killed his wife years ago; the cowboy guy is really an FBI agent and Danny's helping him capture the two (crooked) cops.. but Danny wants revenge. During the drug deal, Danny kills Pooh Bear, some other dealers and then the two cops. Quincy shoots Danny and torches the apartment (what we see at the start of the movie). Jimmy the Fin rescues Danny.
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