This is the breakdown part of Dueling banjos where the guitarist begins to play in time. It starts out with Phrase #2 and progresses from there into the fast picking part we all know and love. Once you've learned this arrangement make sure you switch out some of the licks to learn alternate versions of this solo.
Look over the tablature and listen before playing. Some measures have licks and rolls that are repeated multiple times in the songs. For example, measure 8 is the same as measures 12, 34 & 38, and the first half of measure 8 is the same in measures 10, 14, 36, and 40. So practice measure 8 until it's super easy for you to play 5-10 time in a row, it's a classic piece of Scruggs style vocabulary. Look and see if you can find any other measures that repeat. If you find some, practice those measures individually and repeatedly before trying to tackle the whole song, this way you'll be practicing very efficiently!