In 1874, the U.S. Army discovered gold in the Black Hills of South Dakota, helping spark a gold rush that created the need for a stage line carrying gold from Deadwood in Dakota Territory to Cheyenne on the Union Pacific Railroad. The U.S. military established Fort Hat Creek, a single-company infantry post, in 1875, and three stage stations stood near it over time. The first station was built in 1876 and burned later that year. It was replaced by a long log building that housed a telegraph station, post office, blacksmith shop, road house, stages, and store. In the early 1880s, the two-story, hip-roof stage station that still stands was erected and the second station was torn down. The station stood at the southern edge of the most dangerous section of the Cheyenne-Deadwood Stage Route, where travelers frequently encountered Indians defending the Black Hills territory and road agents robbing stagecoaches. In February 1887, the last stagecoach passed through as the Chicago and Northwestern Railroad replaced the stage line. The station, actually located on Sage Creek, took its name from a mistaken identification by soldiers from Fort Laramie who intended to establish an outpost on Hat Creek in western Nebraska but built it on Sage Creek instead, and the name remained with both the post and the station.