The Southern campaign was at its rawest moment. The catastrophic Patriot defeat at Camden in August 1780 had effectively shattered the Continental army in the South, and General George Washington had finally pulled the reliable Nathanael Greene out of his northern command and sent him to take over from the disgraced Horatio Gates. Greene reached Charlotte on December 2 and made one of the most consequential decisions of the war within days: he split his already-small force in two. Greene took half toward Cheraw. Daniel Morgan, freshly promoted to brigadier general, took the other half west toward the Catawba and Broad rivers. The textbook called the move suicidal. Cornwallis had to chase one column or the other, leaving Greene the initiative.

When Morgan's scouts reported Waters's raiders burning their way through the Fairforest country, the priority was not military, exactly. It was protective. These were the homes of Patriot families, and Loyalist torchings during 1780 had taught everyone what the war now looked like in the Carolinas. Washington took roughly 80 Continental dragoons and 200 mounted militia and moved. The chase covered more than forty miles before his scouts spotted Waters's men in camp near Hammond's Old Store, in present-day Laurens County. Washington pulled his force up onto a hilltop, watched the camp for a moment, and ordered the charge. The dragoons came down first with sabers drawn, the militia in close support.

What happened in the camp below has been described in sources as a slaughter rather than a battle. The Loyalists, caught flat-footed and on foot, were ridden down by cavalry on broken ground. Patriot accounts speak of roughly 150 Loyalist dead and 40 captured, with no Patriot casualties at all. Some of these numbers came from William Washington's own dispatches, and historians have noted that they may overstate the carnage. What is clear is that Waters's force ceased to exist as a fighting unit on December 30, 1780. The men who survived scattered into the woods. The Loyalist civilians who had been with Waters, and the men who fell in those few violent minutes, all became casualties of a war that had grown crueler with every passing month. The phrase backcountry warfare is sometimes used as a softer description of what this was.

Washington pressed his advantage immediately. He detached Colonel Joseph Hayes's Little River Regiment of militia and Cornet James Simons with ten dragoons to ride on toward William's Fort, a Loyalist post about fifteen miles away under Brigadier General Robert Cuningham. When the small detachment arrived, Cuningham apparently judged the strength of the approaching force and abandoned the fort without making a stand. Reports of the engagement differ: some say five Loyalists were killed and thirty wounded before the rest fled; some say the fort was simply burned with food stores intact. Whichever account is closer, the symbolic effect was the same. A Loyalist strongpoint had been swept aside without a fight.

Cornwallis got word at his headquarters in Winnsboro within days. The hammer he reached for was Banastre Tarleton, the cavalry commander whose name had become a byword for Loyalist brutality after the Waxhaw massacre earlier that year. Cornwallis ordered Tarleton west to find Morgan and destroy him, and Tarleton went after the chase with characteristic speed. The chain of events Hammond's Store had set in motion was about to deliver the British their next major defeat. On January 17, 1781, just eighteen days after the skirmish at Hammond's, Morgan turned on Tarleton at a cattle-grazing meadow called Cowpens and ruined his command in less than an hour. The site of Hammond's Store today is quiet woods and farmland off Highway 56 near Clinton, marked by a roadside historical sign and not much else.