On January 4th, the Board of War wrote to Major General Nathanael Greene to congratulate him on his command of the Southern Department and to apologize for North Carolina not raising new Continentals since the fall of Charlestown the previous year. They explained that the North Carolina General Assembly of 1780 did not have much faith in the Continental army and instead decided to employ Militia, which they could raise more quickly and at a smaller cost in bounty money. They then admitted that everyone now realized that this decision was a bad one, especially since Militiamen used up so many provisions and would not fight as ardently as Continentals.

Governor Abner Nash strongly urged the General Assembly to convene again, and they gathered on January 27th in Halifax, once again far from the enemy. This session is considered to be the third session of 1780, and they remained assembled until February 14th. Here they performed another major update to the existing Militia law, and they committed to raising enough men to fill four Continental regiments. After Governor Nash's loud complaints, the NC General Assembly abolished the Board of War and replaced it with the Council Extraordinary, which must work more closely with the office of the governor. With inputs from Major General Nathanael Greene and recent experience with Major General Horatio Gates, the General Assembly passed a law that increased the powers and authorities of the state's Quarter Master General - to alleviate provisioning problems. A total of twelve (12) new or updated laws were passed in this shortened third session of this General Assembly.

In the meantime, Brigadier General Daniel Morgan and a handful of Continental soldiers, along with a fairly large Militia force from Virginia, North Carolina, South Carolina, and Georgia, skillfully defeated British Lt. Col. Banastre Tarleton at the famous battle of Cowpens, SC on January 17th. This wonderful news quickly spread across the nation and once again optimism blossomed everywhere. The "downside" was immediately anticipated by both Brigadier General Daniel Morgan and Major General Nathanael Greene. Within hours of the victory, Brigadier General Morgan quickly took his prisoners northward, acutely aware that British Lt. General Charles, Lord Cornwallis would soon be on his heels.

The "Race to the Dan" soon followed. Major General Nathanael Greene met up with Brigadier General Daniel Morgan at Beattie's Ford in North Carolina, and both agreed that the British prisoners needed to be taken to Virginia and out of Lord Cornwallis's reach. Of course, Lord Cornwallis decided it was in his best interest to get those prisoners back, since there was no telling how long it would take to obtain any replacements. History records that the Patriots won the Race to the Dan, but this soon led to the battle of Guilford Court House, which the Patriots technically lost.

In the meantime, during the Race to the Dan, the British did surprise the Patriots at Beattie's Ford on Feburary 1st, and it was here that they managed to kill Brigadier General (Pro Tempore) William Lee Davidson. This was a terrible loss for North Carolina.

On March 15th, the British handily defeated Major General Nathanael Greene at Guilford Court House, but Lord Cornwallis was well aware that his victory was somewhat hollow. He not only lost a lot of good men, but the expected rallying of local Loyalists never really materialized. He promptly decided to march his tired army to Wilmington, where he had ordered Major James H. Craig to seize in late January so his army would have a port of entry for new provisions and other commodities. While on his march to Wilmington, Lord Cornwallis decided to abandon the two Carolinas in favor of "splitting the South in half" by taking Virginia. By mid-May, there were no British soldiers within the boundaries of North Carolina, and there would be none for the remainder of the war.

However, the long presence of Lord Cornwallis in North Carolina coupled with the British occupation of Wilmington led to a greatly emboldened Loyalist contingent all across the state, but specifically along the Deep River in Randolph County and along the Cape Fear River in Cumberland and Bladen counties. With considerable assistance from Major James H. Craig, Loyalist David Fanning soon launched his year-long attack against all Patriots he met in this region.

Since Lord Cornwallis did not leave North Carolina until mid-May, the 1781 NC General Assembly could not assemble as planned in April. They finally convened on June 23rd at Bloomsbury (aka Wake Court House) and remained in session until July 14th. Abner Nash made it very clear that he did not wish to be re-elected, so the legislature decided to elect Thomas Burke as the third governor for North Carolina. During this session, the NC General Assembly passed eighteen (18) new or updated laws with a broad range of topics. They authorized the raising of yet another 4,000 Militiamen to assist Major General Nathanael Greene in South Carolina, and they again sought to complete the Continental regiments. They also recognized several recent issues - those who had been forced to take parole from the passing British army needed to know what came next, and those who had been wounded or killed in defense of the new nation needed some assistance. Finally, the NC General Assembly decided to trade tobacco for firearms and other war supplies with anyone willing.

The NC Continental Line was slowly reconstituted after the loss at Guilford Court House. Small units soon joined Major General Nathanael Greene in South Carolina and they participated in the Siege of Ninety-Six and the successful retaking of Augusta, GA. On September 8th, four incomplete regiments of NC Continentals joined in the famous battle of Eutaw Springs, SC, as did a large number of NC Militia units.

On September 12th, Loyalist Col. David Fanning audaciously seized Hillsborough and captured Governor Thomas Burke, among others. Most were taken to Wilmington and turned over to British nMajor James H. Craig. Acutely aware of this prisoner's value, Major Craig quickly sent Governor Burke to Charlestown, SC, where he was paroled to James Island. Meanwhile back home, Speaker of the Senate, Alexander Martin, was soon sworn in as the state's first "Acting Governor."

Acting Governor Alexander Martin did his best to get the NC General Assembly to convene for a second time in November, but they never reached a quorum and no business was done. Acting Governor Martin also did his best to help acquire provisions for Major General Nathanael Greene's army in South Carolina, but his hands had been strangely tied due to the inactions of the General Assembly. He could only "twist arms" of his friends across the state and promise them that he would somehow get them paid for their efforts.

In the late Summer of 1781, Brigadier General Griffith Rutherford was exchanged and he returned to lead the Salisbury District Brigade of Militia. He immediately began assembling every Militia regiment under his command, and authorized the creation of a new regiment, known as the NC State Legion under Col. Robert Smith. Rutherford wanted the depised Major James H. Craig out of Wilmington. After several months of recruiting and training, Brigadier General Griffith Rutherford led over 5,000 Militiamen towards his objective, meeting little resistance along the way. British Major James H. Craig smartly decided to evacuate Wilmington on November 18th, and he returned to Charlestown, South Carolina, where he was soon promoted to Lieutenant Colonel.

For the remainder of 1781, Loyalists along the Deep River and the Cape Fear River wrought havoc with the local civilians since most of the Patriot Militia was in South Carolina with Major General Greene, or they were driving cattle and other provisions to him.

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