Sancho and the squire have a courteous and pleasant conversation about squire-hood, and Sancho also learns that the word “whoreson” can actually be used a word of praise. The two squires share food and wine until they peacefully fall asleep.
Meanwhile, the conversation between Quixote and the Knight of the Wood is not as cordial because the latter tells the former that he has vanquished the famous knight Don Quixote of La Mancha. Quixote, hoping first to force the knight to admit his lie, finally makes himself known and challenges the Knight of the Wood to a match as soon as the morning light appears. When the time arrives, Quixote fortuitously knocks his opponent off of his horse, only to learn that it is Sansón Carrasco, whom Quixote believes to also be enchanted, while his squire turns out to be Sancho’s neighbor.