Don Diego's village style house reminds Quixote of his enchanted Dulcinea. Don Diego's wife and son are amazed at the figure presented to them by their husband. Dona Christina, the wife, receives him cordially. The son takes Quixote to be a sane person.
Sancho removes Quixote's armor, and he is able to bathe. The water is an odd color from the curds. When he returns to his hosts, the wife is eager to receive him and the son, Don Lorenzo, to entertain him.
While Quixote was away, Don Lorenzo asks his father what this is about, for he is curious about this person his father introduces as a knight. Don Diego tells his son the man has moments of being incredibly sensible and yet he can be extremely deranged. For himself, he considers Quixote to be a madman. He leaves his son to come to his own conclusion.
Quixote, when he returns to them, mentions to Don Lorenzo that his father said he was a great poet. The son acknowledges he is a poet, but not a great one--and his greatness is more in his father's eyes. Quixote praises him for his modesty.
Don Lorenzo so far doesn't take Quixote as a madman. He asks if Quixote has been to school, and the knight replies he has studied knight-errantry. Lorenzo is unfamiliar with this study. Quixote replies it requires a person to be well versed in all the sciences. He must know the law to know what is just. He must be a physician to heal his wounds. He must be an astronomer to know the stars to count the hours and know the way.
Don Lorenzo concludes it surpasses all other sciences, but he doubts many knights had alll those abilities. Quixote admits many people considered knights really weren't, and they reflect badly on the few who were good. However, he hopes Don Lorenzo will come to realize how beneficial knights could be in this era.
At dinner, Don Diego asks his son what he makes of Don Quixote. The son replies he is a madman with moments of clarity. Quixote later asks him to share some of his verses. When he finishes, Quixote bellows he is the finest poet on earth. Don Lorenzo, despite believing Quixote is mad, is flattered and shares more poems, which are equally praised.
He spends four days with Don Diego, but then asks permission to resume his journey--for a knight should not be idle for long, and he has much to do. Sancho takes full advantage of the kindness of Don Diego in allowing them to full up on their stock of food. Quixote tells Don Lorenzo that if he ever tire of his path, he could have a future in being a knight. With that, Sancho and Quixote depart.