PALO DURO CREEK. Palo Duro Creek rises (at 34°58' N, 102°56' W) in western Deaf Smith County and flows east forty-five miles into central Randall County, where its junction with Tierra Blanca Creek (at 35°00' N, 101°54' W) near Canyon forms the Prairie Dog Town Fork of the Red River. There Palo Duro Canyon begins and the headquarters of the T Anchor Ranch was established in 1877. The creek's upper portion was part of the XIT Ranch's Escarbada Division. In western Randall County the stream is dammed to form Bivins Lake, a main source of water for the city of Amarillo. The creek flows in a flat to rolling area with local escarpments. Hardwood forest, brush, and grasses cover soils that are mostly deep, fine sandy loams.