Selden is an escaped convict who has been living on the moors surrounding the Baskerville estate. A mentally disturbed man, he murdered his parents when he was a child. His sister, who is married to Baskervilles' butler Barrymore, still loves her brother, however, and she and her husband provide the escaped criminal with food and clothing, including some of Sir Henry Baskerville's old clothes. This winds up being Selden's undoing.
Dr. John Watson has been in town investigating the mysterious circumstances surrounding the death of Sir Henry's uncle, Sir Charles Baskerville. Sherlock Holmes has been unable to join him until Watson spots a man out on the moor who he thinks is Selden. Heading to investigate he discovers that it is actually Holmes who has been living in a shack on the moor and conducting his own investigation from a safe distance. It is while the two are catching up that they hear screams from nearby, accompanied by savage growls.
Goodhearted fellows that they are, they race to the rescue, but arrive too late. The hound is gone and his victim lies face-down in a small ditch. Initially the pair think the corpse is that of Sir Henry, because the body is wearing Henry's clothes. Holmes blames himself for not making his move sooner, but, as Watson turns the body over, it is revealed to be Selden!
After breaking the news to the dead man's sister, Holmes concludes that the reason the hound attacked Selden is because he was wearing the clothes from Sir Henry, which would've had Henry's scent on them.