After leaving his governorship, Sancho is traveling with his mule, Dapple, to the castle of the duke an duchess in order that he may reunite with his master, Don Quixote, and he meets up with six pilgrims, although one is in fact his neighbor, Ricote. Sancho and Ricote discuss his situation since he has been forced to leave his village in obedience to the king’s edict to expel the Moriscos from Spain and that his real purpose now is to carry off treasure he has left behind; he tries to persuade Sancho to go with him offering him a portion of the spoils, but Sancho says, “Well-got wealth may meet disaster, but ill-got wealth destroys his master.”
Continuing on after the sun has set, Sancho and Dapple accidently fall into a pit, are unable to get out the way they came, and end up spending the night trapped; though at dawn, Sancho finds a crevice large enough for him to crawl through, widening it for Dapple, and curious to see where it leads, he and Dapple are able to walk a mile and a half through vaults, caves, and dungeons until they come into sunlight. Sancho calls out for help, and lo and behold, there is Don Quixote at the mouth of the ditch to immediately help his squire and his mule out of the pit.
The time has come for the challenge between the noble knight Quixote and the farmer’s son who reneged on his promise to Doña Rodriguez’s daughter, although the duke sent his lackey, Tosilos, in his stead and gave him specific orders on how to defeat Don Quixote. However, the moment Tosilos lays eyes on Doña Rodriquez’s daughter he falls in love with her, refuses to fight at all, and proposes matrimony; therefore, the challenge is called off, Don Quixote is declared the victor, and Tosilos is temporarily locked up to see what may become of his conversion.