Noggs goes upstairs to find a drenched Nicholas and Smike, who are both exhausted from their journey. Nicholas regrets asking to stay the night with Noggs, who obviously is not a wealthy man. Noggs, though, is glad to see Nicholas. He tries to make his humble place as comfortable to them as possible. Nicholas is able to purchase a meal for all of them. He has a change of clothes for himself and a coat for Smike.
Noggs confirms that Nicholas’ family is still in London, and that Kate is now employed.
Nicholas then asks what his uncle knows about what has happened at the Squeers’. Noggs is reluctant to tell him. Nicholas doesn’t regret what he has done, no matter what the consequences. He couldn’t be an accomplice to the cruelty that went on at the school. He gives Noggs the details. Noggs tells Nicholas he won’t do well in the world if he constantly comes to the aide of everyone who is mistreated. On the other hand, Noggs is proud of him and states he would have done the same.
Noggs shows Nicholas the copy of a letter that his uncle received from Fanny Squeers. In it, she accuses Nicholas of assaulting her father, who will never regain use of his legs. Her mother’s comb was nearly shoved into her brain. Fanny and her brother also suffer pain from invisible injuries. She continues to say that Nicholas also stoled a ring, and then ran off with one of the troubled boys. Fanny writes that her father requests that if Nicholas goes to Ralph Nickleby, to have the uncle kindly restore the ring that was stolen. They are not going to press charges because they are certain that his violent nature will get Nicholas hanged eventually.
Nicholas wants to go to his uncle to tell him the truth, but Noggs says he is out of town for three days. He will not answer the letter until he returns. He barely read it before he left. Noggs advises Nicholas to not see his family until he visits his uncle. He encourages Nicholas to tell his uncle what happened. He is confident that Ralph Nickleby will be able to discern the truth.
Meanwhile, the party downstairs tries to figure out why Noggs left so abruptly. The uncle is offended that Noggs took his punch with him. He decides to go home, distressing the guests and hosts alike. Eventually, though, the Kenwigs manage to mollify him into staying.
Mr. Cowl tells them that he overheard some of the conversation Noggs had with his guests. He believes the men have ran away from somewhere.
They hear screaming coming from the room where the Kenwigs’ infant is sleeping. Nicholas rushes out of the room with the baby, saying the servant fell asleep and ignited her hair accidentally with the candle. The girl only has minor injuries, and the baby is unharmed.
Nicholas excuses himself, saying he has had a long journey and is tired. The company is impressed with him, particularly the ladies. Upstairs, Nicholas is asleep, oblivious to all.