March 27, 2009 -- The Amish are widely viewed as plain, peaceful people. Reclusive and private, most people only catch glimpses of them as they make their way through the hills of Pennsylvania's Dutch County in buggies.

But some of their perfectly manicured farms are home to a secret world. Lancaster County has been called the puppy mill capital of the U.S., and the trade is largely dominated by the Amish.

It is a world most people never see, but undercover video shot by Main Line Animal Rescue provides a startling look. Hundreds of puppies can be seen stacked in crate on top of crate. Most of those puppies will eventually be sold to pet stores, but their mothers will likely never know a home other than this.

The female breeders live their life producing litter after litter... until they can't any longer. Bill Smith, the founder of Main Line Animal Rescue, says that the dogs are then disposed of -- sometimes euthanized, sometimes shot. And it's perfectly legal.

"Unfortunately if a kennels breeds less than 60 dogs they can shoot them," he said. "If it's over 60 dogs they can't be shot."

That's why Smith spends so much time driving the country roads of Amish country, rescuing dogs from breeders. On the day "Nightline" visited, he convinced an Amish farmer to give him a female golden retriever who could no longer breed, in exchange for some free dog food. The dog -- who spent her life in a cage -- struggled to walk.

"When they come out of the rabbit hutches they walk like crabs because they don't know what it's like to walk on a proper surface," Smith said. "They drag their bodies."

There are about 300 licensed breeders in Lancaster County, and rescue workers estimate another 600 unlicensed facilities operate in barns and sheds. Those breeders go to great measures to avoid discovery. Smith says some even "de-bark" their dogs.

"The farmers, the Amish and the Mennonites, they pull the heads back and then they hammer sharp instruments down their throats to scar their vocal cords so they can't bark," he said. "So that way they can have 500-600 dogs in a barn and no one knows. As we said, it's an industry of secrecy."

Secretive and profitable. Breeders can make upwards of half million dollars a year. The Amish breeders sell the dogs at auctions and the puppies at pet stores.

Purchasing Puppies: 'People Are Deceived'

"People are deceived," Smith said. "They're nice enough and they put down their money and they walk away with a dog and they don't realize that there are 500 dogs in a barn and are suffering horribly. So it's something that people have to be aware of. They have to know that going in. When they buy these dogs, they're keeping that going."

In one night, Smith and his team rescued a dozen dogs, which were unloaded at its facility. The next day, rehabilitation began.

"Dogs in this community are viewed as livestock," Smith said. "Nothing more. Chickens or pigs or goats. It's just a source of income for them."

Ezekiel -- not his real name -- is a Mennonite farmer in Pennsylvania. He agreed to speak to "Nightline" under the condition that we not reveal his name or exact location. He fears what he calls "militant" animal activists.

"I am the type of person … I don't believe in animal rights," he said. "But I highly believe in animal welfare."

The difference, he says, is that "animal welfare is you treat the dog how you want to be treated. And animal rights activists, they just have a different mindset, a mentality, that, I've never really figured it out. "

Ezekiel showed us the "public" face of his business. The heated shed where buyers are invited to pick out the puppies they want.

"The puppy we sell here is a healthier puppy than if I had Lassie running around, feed her puppies over here," he said. "The way that we raise them is much healthier than the other way."

Then we asked him to show us the back room, where the public is not allowed. He gave us an exclusive look inside his facility where he breeds hundreds of dogs in cage after cage.

He considers the facility to be top of the line. There is no chicken wire, the dogs stand on plastic grating and they have access to solid floors, and he showed us his "state-of-the-art" waste disposal system.

"This system is commercially available, they use it in swine and veal and things like that," he said.

Inside Access: 'They Love Being Here'

The technology, he says, allows Ezekiel and his wife to take care of all 200 dogs by themselves.

"The way we have the building set up, the modern way, if we have to go back, if new legislation goes into effect, we will not be able to care for this many dogs because it's just going to be so much more labor intensive," he said.

Pending legislation would require dogs to have solid flooring and access to the outside to exercise. Ezekiel says that is unnecessary.

"What she's doing is she's running," he explained, showing us a dog on an exercise wheel in an an enclosed space. "She's getting her exercise, you know instead of letting them run around ... we put them in there, they use more muscles that they wouldn't use running around."

"In the state of Pennsylvania, the confinement laws that we have, that if the dog goes off our property, we can be arrested for it," he said.

He added that it would be "more inhumane" to have the dogs "out in the mud, in the cold, the rain, [the] wind."

Ezekiel says his dogs are healthy and happy, and says he doesn't operate a "puppy factory."

"If this would be a puppy factory, that Daschund you see right there, she wouldn't be doing what she was doing. She's wanting me to hold her, if she would be a puppy mill she would cowering in the back of that box, you can see, a lot of our dogs, they love being in here."

Back at Mainline Rescue, the dogs rescued last night are being assessed by a veterinary technician. Smith says he's rescued about 2,000 dogs from the Amish and almost all of them have been placed in permanent homes.

"I would encourage people adopt," he said. "Eight million dogs are euthanized; 8 million pets are euthanized every year in this country and yet they breed 8 million dogs."

Much of that breeding happens in Lancaster County, home to one of the most secretive people -- and industries -- in the nation.

CLICK HERE for more information about Main Line Animal Rescue.