Sancho spends the afternoon with the duchess and her maids discussing the Lady Dulcinea. He admits that he deceived his foolish master into believing that the Lady Dulcinea was enchanted, but the clever duchess convinces Sancho that he was the one enchanted because he was the one who was deceived by the enchanter into feeling guilty.
The duke and duchess arrange a scheme involving Don Quixote and Sancho, and it begins as so: during a hunting party out in the woods, there emerges a postilion appearing as a devil who addresses the duke with a message for Don Quixote informing him that Lady Dulcinea is on her way to see him. She is enchanted, and she is with the Frenchman, Montesinos, who will give instructions on how she is to be disenchanted.
Next, a figure of death, named Merlin, appears and gives ludicrous directions for Sancho to lay 3,300 stripes upon his bare backside in order to save the Lady Dulcinea. Don Quixote is insulted and threatens the figure, while Sancho protests; however, the duke reminds Sancho of his governorship, and Merlin clarifies that Dulcinea will return to the cave of Montesinos as a peasant wench, or else “carried off to Elysian fields until the number of lashes are complete.” Sancho consents.