Don Quixote climbs to the top of a high mountain and spends his days weeping and writing verses. He survives on herbs. Sancho is only away three days, which is fortunate as Quixote would have declined if he had been away longer.
Sancho goes to El Toboso. He arrives at the inn where he had been tossed into the air by the guests with a blanket. He would like something to eat, but he is too frightened to enter.
Two people come out who both recognize him. It is the barber and the curate from La Mancha. They go up and ask where Quixote is. Sancho refuses to reveal Quixote’s location, only saying that he is handling things of great importance.
The barber threatens Sancho that if he does not disclose Quixote’s whereabouts, they’ll assume he has robbed and killed him—as he is riding Quixote’s horse. Sancho tells them that Quixote is doing penance in the mountains and gives the details of their adventures. He also tells them the reason why his master has dispatched him.
They ask to see the letter to Dulcinea, but Sancho realizes that Quixote never gave it to him. He beats himself, drawing blood, for also missing is the letter ordering three donkeys to be given to him. The curate suggests they find Quixote so he can re-do the letters in an official manner that will be recognized by the law. They have Sancho tell what he remembers of the letter to Dulcinea. He tells them that Quixote plans to make him a king. they are surprised at how contagious Quixote’s madness is. They tell Sancho they need to rescue Quixote. Sancho doesn’t want to enter the inn where they are going to form their plans, so they bring him his food.
The curate plans to dress up as a damsel-errant, and the barber will be his squire. He will beg Quixote to follow him to redress an injury done by a wicked knight. He’ll wear a mask that he’ll force Quixote to promise not to ask him to take off until Quixote triumphs over his opponent. They will lure him home.