Instead of admitting that Don Quixote took a vicious beating from a group of Yanguesans, Sancho claims to the innkeeper that his master only fell and injured himself. The wife and lovely daughter of the innkeeper tend to Don Quixote’s wounds. Don Quixote starts to think that the daughter is in love with him, imagining that she has agreed to lie with him that evening. However, the daughter’s hunchbacked servant, Maritornes, creeps into his room that night. She does so because her bed is with a carrier who is in the room occupied by Don Quixote and Sancho. In an aside, the author informs us that Cide Hamete Benengeli specifically makes mention of the carrier because he is a relative.
Maritornes is almost blind, and she inadvertently makes her way to Don Quixote’s bed instead of that of the carrier. Don Quixote thinks she is the beautiful daughter and he begins trying to woo her. As a consequence, the carrier attacks him. Maritornes turns to Sancho’s bed for refuge, trying to hide. The innkeeper is awakened by the chaos, and he makes his way to the bedroom. He, Sancho, and the carrier have a terrible brawl. A guest who is an officer hears the fighting and ventures upstairs to intervene. When he officer sees Don Quixote passed out on his bed, he thinks he is dead. He leaves to fetch a light so he can properly see the scene.
Don Quixote claims to Sancho that the inn is enchanted. He tells him his version of the evening’s events, asserting that a princess came in because she was in love with him and a giant attacked him. At this point, the officer comes back, and Don Quixote accosts him with an insult. The officer then beats the gentleman. Sancho is upset about the injuries he has himself incurred, and he objects to Don Quixote’s story. Don Quixote, however, promises that he will make the balsam that can cure his wounds. He advises Sancho not to get angry when enchantments occur, as there is no way of stopping them.
After mixing the ingredients, Don Quixote drinks the potion. He quickly vomits and loses consciousness. When he wakes up, he feels better and thinks that he has successfully made the mythical balsam. Sancho takes the potion, as well, and while it makes him terribly ill, he fails to vomit. Don Quixote reasons that he balsam cannot work on Sancho because he is only a squire, not a knight.
As Don Quixote begins to leave the inn, the innkeeper asks that he pay his bill. The gentleman is shocked that he is in an inn rather than a castle, and he refuses to pay. He says that knights-errant are never required to pay for their lodging. He departs on his horse, shouting insults at the innkeeper. Sancho is captured by some rogues at the inn. Sancho refuse to pay as well, and they trap him in a blanket. Don Quixote has too many bruises to dismount his horse, but he imagines that it is the enchantment that is stopping him from assisting Sancho. Sancho is ultimately able to get away, and is proud of himself for not having paid. It is found, however, that the innkeeper has taken Sancho’s saddlebags.
Don Quixote and Sancho ride away from the inn. Sancho makes bitter complaints to his master about his injuries and misadventures. Don Quixote suddenly perceives dust clouds moving along the road and thinks they are two large armies about to enter battle. Sancho informs his master that, in reality, the clouds have arisen from two herds of sheep. Don Quixote doesn’t believe him, and he presents a detailed description of the knights he imagines he perceives in the dust. Eventually, Cervantes suddenly ends the account, saying that Don Quixote is only reciting ideas he has found in his “lying books” of chivalry.
Don Quixote rushes towards the clouds, thinking he is engaging in battle. He ends up killing seven sheep. Two shepherds try to ward him off by throwing stones at him. This knocks out a number of his teeth. Sancho says again that the armies were just sheep. Don Quixote responds that a sorcerer transformed the armies into sheep in the middle of battle, simply to obstruct his efforts. Don Quixote imbibes more of his balsam. When Sancho approaches more closely to examine the injuries to his master’s teeth, the gentleman vomits all over him. This makes Sancho nauseous, and he vomits on Don Quixote in turn. Sancho goes to find something he can use in cleaning themselves up, and he finds that his saddlebags are gone. Annoyed and angry, he declares his intention to go home. Don Quixote responds that he would prefer sleeping at an inn to spending the night in a field, instructing Sancho to bring him to such an establishment.
Sancho makes Don Quixote believe that all of their problems have arisen from the gentleman’s violation of his promise to maintain a strict lifestyle until he can find a new helmet. Don Quixote agrees that his must be true, saying that he had forgotten his vow. He puts the blame on Sancho for not reminding him. As it starts to become dark, the two men see a group of priests who are mourning with the body of a dead man. The priests will not identify themselves, and Don Quixote knocks one of them from his horse. The others rush away. Don Quixote informs the priest that he has arrived to avenge injuries. The priest counters with the complaint that Don Quixote has only injured him and has nothing to avenge.
Sancho takes some goods from the priest’s mule. The priest leaves, and Sancho shouts after him that the attack was Don Quixote, the Knight of the Sad Countenance’s work. Don Quixote likes this new title, and he asks Sancho how he invented it. Sancho explains that with missing teeth, Don Quixote’s face looks sad. Don Quixote rejects this, however, claiming that Sancho gave him his new name because a sage caused the title to enter Sancho’s brain. The gentleman claims that this sage is dictating the story of his life. The two men enter a valley and find a place where they eat dinner. They converse, and Cervantes promises he will relate what they said in the next chapter.
Don Quixote and Sancho hear a frightening pounding noise. Sancho begs his master to delay checking on the sound until morning. Don Quixote, however, swears that he will confront their mysterious foe. He tells Sancho to wait for three days before telling Dulcinea of his death if he has not come back. Sancho immobilizes Rocinante by tying up his legs. When Don Quixote finds his horse refuses to move, he must wait until morning to find the source of the sound.
Sancho starts telling his master a story. He presents each detail twice, but Don Quixote interrupts, demanding that he tell the tale only once. Sancho, however, insists that this is the manner in which stories are told in his place of birth. Don Quixote lets him continue as he was. Sancho moves to a vivid description of a shepherdess. Don Quixote inquires whether he was acquainted with the shepherdess. Sancho replies that he did not know her, but that the first time he heard the story, she seemed so real that he could now swear that he had once seen her. Sancho tells his master about a shepherd who was in love with the shepherdess and was compelled to bring his herd of goats across a river. He tells Don Quixote to keep count as he tells the tale of the number of goats the shepherd brings across. Half-way through the story, Don Quixote orders Sancho to pretend that all the goats are already on the other side of the river and just get on with the story. Sancho asks whether Don Quixote can say the number of goats have already crossed, and his master must admit that he cannot. Sancho stops telling the story, and his Don Quixote is unable to persuade him to tell him the ending.
Don Quixote and Sancho depart in the morning. Cervantes asserts that the faithfulness Sancho shows makes Don Quixote believe that he must be a good man. When they reach a small number of houses beside a river, they find that the frightening pounding sound was coming from fulling-hammers, which are used in beating cloth. Sancho finds this humorous, annoying Don Quixote. He hits Sancho with his lance. Don Quixote tells Sancho to speak less to him from now on. Sancho goes along with the order after Don Quixote informs him that he has included him in his will.