Colonel to Bounty Hunter
So aside from Prophet's explanation of "It was those damn trains!" it's never explained how Douglas Mortimer went from army colonel to "lowly" bounty hunter.
What do you think he did? He's still being referred to by rank so perhaps he wasn't booted from the army?
My guess - Retired from the army to pursue Indio until the time came when he had a bounty on him so he could kill him legally. Living on the army pension but supplementing his income with bounty hunting.