The puppet show is performed. Don Quixote shouts in the middle of it, critiquing the narrator’s habit of divulging side plots. Then he argues with something he considers to be incorrect. Master Peter asks Quixote not to dwell on trivialities and expect perfection.
Then Don Quixote goes to rescue the hero knight puppet. He hacks away at the Moor puppets surrounding the knight puppet and his wife. Master Peter asks him to desist, for he is ruining his livelihood. Quixote does not stop but destroys everything. The ape runs to the roof. The guests are confused. Quixote’s friends are alarmed.
Don Quixote tells them that is why they need knights. If it hadn’t been for him, the couple in the play would have been overtaken by Moors. Master Peter laments his fall—for he has been ruined by the destruction of his property. Sancho assures him that Quixote will reimburse him for the damages.
Don Quixote believes the puppets had been real people, but the evil enchanters fooled the senses of everyone. However, he agrees to pay Master Peter. The innkeeper and Sancho agree to be assessors to determine what is owed. Master Peter shows how his puppets have been damaged. A price is agreed upon.
The cousin and page leave the next morning. Don Quixote gives the page money. The puppeteer collects his ape and hurriedly departs. It is revealed that he was really Ginés de Pasamonte.
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