The Wyoming Colorado (not the Colorado and Wyoming) took over the branch in 1987 and ran it until 1995. Initially there was much coal coming out of North Park, but due to various reasons, that mine couldn't compete. Near Walden there was CO2 gas and woodchips that where shipped but this business also gradually disappeared.
When the shortline started, they leased a set of ex-Alaska FP7s and a a set of stainless steel passenger cars, including 2 ex-CZ domes. Initially they ran excursion trains on the entire railroad, but eventually settled on Fox Park turns out of Laramie. Even though the scenery ranks up there with other Colorado scenic railroads, they really couldn't make a go of it without any freight business. The first 20 miles out of Laramie is a bit boring, and as the track conditions suffered, it took longer and longer to make it to the good part. Finally the parent company threw in the towel and did what was feared all along, given they were in the scrap business.
Some good documentation on the railroad includes Ken Jessen's Northern Colorado Railroads, and the WB video "Assault on Snow". Coincidently, I was up there yesterday to get some photos for a project I am working on. The FP's and final set of passenger equipment migrated south to Arizona.
Bill Kepner