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Don Quixote and Sancho enter Barcelona with a great following as the guests of Roque Guinart’s friends. A boy in town places burrs in Rocinante’s and Dapple’s tails, causing the two animals to throw their masters, much to the amusement of everyone but Don Quixote and Sancho.
Don Quixote and Sancho’s host, Don Antonio Moreno, confides in Don Quixote that he owns an enchanted brass head that answers any questions asked of it. The next day, Don Quixote and Sancho parade around Barcelona with thousands of people following them. Don Antonio’s men place a sign on Don Quixote’s back that identifies him, and all the people of the town call to him. Don Quixote interprets their calls as proof of his fame. At a ball that evening, Don Quixote dances until he drops, and Sancho is embarrassed for him.
The next day, the brass head speaks to the guests via a hidden tube that allows a servant in the next room to hear and answer questions. Don Quixote asks the head whether the incident in Montesinos’s Cave was real, and the head says that the incident was partly true and partly false. Don Quixote then asks whether Sancho will be whipped in order to disenchant Dulcinea, and the head answers that though Sancho’s whipping will go slowly, Dulcinea’s disenchantment will eventually be accomplished. Don Quixote then goes to a publishing house, where he discusses the art of translation with a translator and expresses his preference for histories that can be proved to be authentic.
Don Quixote, Sancho, and Don Antonio visit the galleys. As a prank, the men hoist Sancho onto their shoulders and pass him around the ship. The ship amazes Sancho, who concludes that he must be either in hell or in purgatory. The galley captain spies a pirate ship in the distance, which they approach and stop. A skirmish ensues, and two of the galley soldiers die. Upon questioning, the captain of the Moorish pirate ship turns out to be a Christian woman, Anna Felix, who is an exiled Moor returning to Spain for a treasure her father buried before he left. Sancho’s friend Ricote, a tourist on the ship, recognizes Anna, his daughter, and they embrace. Together, they invent a plan to save Anna’s lover, Don Gregorio, who remains stranded in Moorish lands.
Riding around one morning, Don Quixote encounters the Knight of the White Moon, who challenges Don Quixote and makes him swear to go home and stay there for a year if he is defeated. Don Quixote agrees and the two fight. The Knight of the White Moon conquers Don Quixote but says that he will not defame Dulcinea’s beauty. Don Quixote accepts the condition that he return home for one year.
Don Antonio and others desperately want to know the true identity of the Knight of the White Moon, so they follow him to an inn and pester him until he admits that he is Sampson Carrasco. Don Antonio chides Sampson for trying to bring Don Quixote back to his senses when people are deriving so much pleasure from his madness. Meanwhile, Don Gregorio, rescued from Algiers, returns to Barcelona, where he is happily reunited with Anna Felix.
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