The problem it seems is actually in the bdb module and not in pdb. The 
set_next function sets the current frame as stopframe but it does not 
specify the stoplineno. Hence it's always -1. When you do c(ontinue), 
set_continue just sets botframe as stopframe, if there are no breakpoints.  
Hence, stop_here wrongly returns True on every line event. To rectify 
this, set_next should also specify stoplineno for the stopframe and this 
should be checked in stop_here before returning True. Here is the patch.