For a three-act plot analysis, put on your screenwriter’s hat. Moviemakers know the formula well: at the end of Act One, the main character is drawn in completely to a conflict. During Act Two, she is farthest away from her goals. At the end of Act Three, the story is resolved.
Act I
Doctor Mortimer brings the case of the Hound of the Baskervilles to awesome consulting detective Sherlock Holmes.
So, when we start out this novel, it might seem like it's going in the direction of a classic ghost story. After all, Doctor Mortimer is sure that there is something evil and supernatural behind Sir Charles Baskerville's sudden death. He's so sure, in fact, that he doesn't know if it's safe for his heir, Sir Henry Baskerville, to live at Baskerville Hall. What if Sir Henry also gets killed by a hellhound? The neighborhood would look bad if they lose yet another Baskerville to their local ghost dog. Property values would definitely go down.
On the other hand, this is a Sherlock Holmes novel, which means that it's a detective story. It's about Holmes and Watson using their great investigative skills to find the real-world criminals of Victorian England. Since Holmes is involved, and he's a rational, scientific kind of guy, we have to assume that the ghost-dog theory of Sir Charles' death isn't true. But then, who is threatening the life of Sir Henry Baskerville?
Act II
By Chapter 11, Watson's found so many plot complications that it seems impossible to sort out a single, sensible story about Sir Charles' death and Sir Henry's current dangerous predicament.
There are so many twists and turns to this novel's plot that describing it is like trying to describe what happens in Cloud Atlas (Shmoop had to go to Wikipedia to figure that out). So, there's the butler Barrymore, who seems like a suspect until he turns out to be a good guy just looking out for his wife and her psychopathic little brother. There's Laura Lyons, who clearly knows more about Stapleton's involvement in Sir Charles' death than she's willing to say.
Add to all this the occasional sound of a low, moaning howl ringing out over the moors, which the locals explain as the howl of the Hound of the Baskervilles, and you've got a suspenseful stew of details. A lot of clues emerge over the course of Watson's time in Dartmoor, but without Holmes to put it all together, we have no idea which plot points are most important.
Act III
In Chapters 12 through 15, Sherlock Holmes finally shows us what's really going on—and it has nothing to do with the Powers of Darkness.
All this time, Holmes has been living out on the moors and keeping an eye on Watson and on the neighborhood around Baskerville Hall. Holmes already knows that Stapleton's the murderer, that he's somehow been using a giant dog to take advantage of the local legend of the Hound of the Baskervilles, and that he's been using his wife as bait for Sir Henry by pretending that she's just his sister. All Holmes needs to do is find definite proof that will hold up in court.
Holmes, Watson, and a London policeman named Lestrade set up an ambush that draws Stapleton (and his large, glow-in-the-dark dog) out in the open to attack Sir Henry. But while they manage to shoot the dog, Stapleton disappears into the fog of the night. Watson guesses that he drowns in the nearby bog, the Grimpen Mire, where he's been hiding his vicious dog. And so now we know for sure: there are no ghosts in Dartmoor, no matter how gloomy the setting may be. The only evil out there lies in the hearts of men.