A Don Alvaro Tarfe arrives at the inn, and Don Quixote remembers seeing the name in the history written about him. Quixote questions the man. He admits that he is the same Don Alvaro, and that he was a good friend of Don Quixote's who had encouraged him to attend the jousts at Sargossa...and who saved him from the executioner.
Don Quixote asks if he resembles that Don Quixote, and Don Alvaro says no. Quixote then asks about the squire Sancho. The man said that Don Quixote did have a squire named Sancho, though not as droll as reputed to be. Sancho identifies himself and Don Quixote as the real thing. Don Alvaro is willing to believe it, for they are superior to the ones he knew.
Don Quixote reveals the differences between them and the imposters. Don Alvaro marvels at this. Sancho tells him he was enchanted, just like Dulcinea--who Sancho plans to free tonight. Don Quixote tells Don Alvaro their adventures. Sancho finishes his penance that night. Don Quixote eagerly looks at the road, hoping to see the restored Dulcinea come to him.