Quixote tells them what happened to him in the cave. He had rested in a part of a cavern. He thought he had fallen asleep when he found himself in a beautiful meadow. He saw a palace of transparent crystal. An old sage approached him. He identifies himself as Montesinos. He tells Quixote he has waited for him to come so Quixote can tell the world what he saw down in the cave.
Quixote asks if the story is true that Montesinos cut out the heart of his friend to carry to the Lady Belerma (at his friend’s request). Montesinos says it is mostly true, only he didn’t use a dagger to do it.
Montesinos takes him to the tomb of a knight. The statue is actually flesh and bone. It is Montesino’s friend, whose flesh is kept from decaying by the enchantments of Merlin. Suddenly, the knight cries out, begging Montesinos to take his heart to the Lady Belerma. Montesinos tells him that the deed was done long ago. He explains to Quixote that though five hundred years have passed, they have not died. Merlin changed the Lady Ruidera and her daughters into lagoons—known as the Lagoons of Ruidera. Guadiana, his friend’s squire, was changed into a river—which is supplied by the lagoons. His grief over his master’s death causes him to produce tasteless fish. Merlin prophesied that Quixote was there to end the enchantment.
A mourning procession of damsels in Turkish fashion appears. A lady walks at the rear, holding a mummified heart. They hold the procession four days a week. The lady’s beauty has faded with her grief.
Quixote can’t believe he was only down there for an hour He believes he spent three days in there. He never felt hunger, the urge to relieve himself, or the urge to sleep. Sancho doesn’t believe the story, though he never thinks Quixote lies.
Quixote says Montesinos showed him the three peasant girls, one which was Dulcinea. Her companions were Queen Guinevere and her duenna Quintañona. Sancho laughs, knowing Quixote is crazy.
Quxiote ignores Sancho’s insults. He says he tried to talk to Dulcinea, but she would not speak. She fled from him. Montesinos told him not to follow. One of her handmaidens returns and says Dulcinea kisses his hands, and asks for him to give her six reals for her petticoat—for she needs the money. He gives her all the money he has—four reals. He begs Dulcinea to show herself and promises to free her from the enchantment.
Sancho is convinced that Quixote’s senses were destroyed. Quixote tells him he will be able to prove the truth of the story.