Don Quixote admits he should have taken Sancho’s advice and not assisted the rogues. Sancho asks him to take his advice now—the Holy Brotherhood will come after them. Quixote calls Sancho a coward but agrees to go into hiding, just so Sancho can’t complain that he never listens to him. However, he tells Sancho that he must tell anyone who asks that he didn’t go into hiding out of fear, but only at Sancho’s request. Sancho tells him that it isn’t running away to protect yourself from a perilous and hopeless situation so you can live another day.
Sancho leads them to a rocky area where they can hide. He is thankful that the galley slaves overlooked the provisions on his donkey.. He plans to stay in this area until their provisions run out.
However, Ginés de Pasamonte discovers their camp during the night. He steals Sanchos’ donkey while he sleeps. Sancho is grief-stricken when he discovers his donkey is missing the next morning. Don Quixote promises to give him three of his donkeys that he has at home, and Sancho is comforted.
Don Quixote likes the area they are in, for it promises adventure. He remembers stories about knights traveling in wild places like this. Sancho is forced to carry their provisions and go on foot now that he has lost his donkey. He shoves food into his mouth as he walks and wants no more adventure.
Don Quixote finds a half-rotten saddle cushion with a portmanteau fasted to it. Though the portmanteau is locked, Sancho can see through the tears that there are nice clothes and a handkerchief filled with gold coins. There is also a bound memorandum book. Quixote wants the book but lets Sancho have the money. He believes thieves overtook a lost traveler and killed him. He is probably buried near here.
Sancho doesn’t agree, since he doesn’t think robbers would have left the money behind. Don Quixote examines the book. There are some poems. It also seems to be diary.
Sanch considers himself well-rewarded for all he has had to endure. Quixote starts forming a romantic picture of the owner of the book—a lover driven to desperation after bieng rejected by his lady love.
They continue on and see a half-naked man who is remarkably agile. Quixote believes the belongings are the man’s and he wants to follow him. Sancho doesn’t want to seek the man. He doesn’t believe he is the true owner of the items, but mostly he doesn’t want to return the money. Quixote says it is their duty to return the items if they find the owner.
They find a dead mule, which makes them believe the man is indeed the owner. They see a goatherd nearby. The goatherd believes the wild man is also the owner of the mule and the portmanteau. He wouldn’t touch the portmanteau, believing it would bring bad luck.
The goatherd tells them that six months ago, a handsome man rode in on the dead mule with the portmanteau. He asked for directions to the most hidden part of the mountain. They told him, and he went off. They saw him some time later, raggy in appearance, trying to steal food from them.
They searched for him and found him. He said he had to live this way to repent for his sins. They tried to learn more but he wouldn’t say. They offered to give him food if he asked—he didn’t need to steal from them. He agreed. He then went into a fugue state. When he came out of it, he attacked one of the men, calling him a traitor and by the name of Fernando. They believe he is insane.
The goatherds want to capture him, take him to a place where he can get cured, and restore him to his relatives. Quixote wishes to find him to learn his story.
Suddenly, the man appears. Quixote embraces him.