After successfully sabotaging Balto's attempts to enter the team of huskies that would deliver medicine to the village following a blizzard and an outbreak of illness, Steele became lost but refused to admit it: ultimately knocking out his master when he causes the sleigh to swerve uncontrollably in the snow, leaving him and his pack alone in the blizzard with no hope of returning home.
However when Balto sought the team out and offered his aid Steele, instead of being grateful, became enraged and had a brief confrontation with Balto - who refused to fight him: during this fight Steele falls off the cliff but survives: in a final act of villainy he deliberately tampers with the markings Balto had left on the trees so that they would not find their way back. This clearly shows he doesn't care that the children would die without the medicine, showing his true evil.
Steele then returned to the village claiming innocence, even blaming Balto for the "accident" - Jenna sees through his lies but the other dogs see him as a hero, at least until Balto embraces his wolf heritage and is able to smell the trees he clawed and he and his team eventually arrive back in the village with the medicine, much to Steele's surprise and horror.
Steele is left an outcast when the other dogs realize the truth and finally loses the respect he once had with his fellow canines while Balto is treated as a hero.