Arriving at Sir Henry's hotel, Holmes examines the register. Tricking the clerk into thinking he knows the two names added since Sir Henry, he gleans information that excludes the two from suspicion. So, the detective concludes, the watcher has not settled in Henry's hotel, and as such, wants very much to see but not to be seen.
Heading upstairs, the pair runs into a flustered Sir Henry, enraged at the theft of a second boot, this time an old one. Denouncing the hotel staff, Sir Henry is surprised at Holmes' suggestion that the thefts may have something to do with the case.
At lunch, Holmes, Watson, Henry, and Mortimer discuss Sir Henry's decision to go to Devonshire, and Holmes assents given the extreme improbability of unmasking the stalker in crowded London. Holmes asks if there is not anyone up at Devonshire with a full black beard, and learns that the butler, Mr. Barrymore, fits that description. Intent on assessing whether Barrymore is at home or in London, Holmes sends a telegraph to Mr. Barrymore that will be delivered to his hand or else returned to sender. Barrymore, Mortimer relates, stood to inherit 500 pounds and a cushy, work-free setup upon Charles' death. Asking about other heirs and beneficiaries, Holmes learns that Mortimer himself received 1000 pounds, and Sir Henry got 740,000. The next in line, Mortimer states, is a couple named Desmond, distant cousins. Holmes declares that Sir Henry needs a more attentive bodyguard at Baskerville Hall than Mortimer. Citing previous commitments in town, Holmes declines to go himself and surprises everyone by suggesting that Watson accompany the baronet. Holmes insists that Watson keep him updated. While they are getting ready to leave for their office, they are surprised by a cry from Sir Henry. Diving under a cabinet, Henry discovers the first boot he lost (the new one) despite the fact that Mortimer searched the lunchroom earlier that afternoon. The waiter, when asked, denies any knowledge of who placed the boot under a cabinet.
Back at 221b Baker Street, the detectives try to piece together the threads of the case, but they soon hear by wire that Barrymore is indeed in Devonshire and that young Cartwright has not found the mutilated newspaper. However, the cab number proves useful—the cabman himself, irked at what he assumes is a complaint, arrives at the office. Holmes assures the man that he just contacted the cab company to get some information, and promises him half a sovereign if he cooperates. Holmes gets the man's name and asks about his mysterious morning fare. The cabman announces that the fare, calling himself Sherlock Holmes, was nondescript and ordered to him to do just what the detectives saw. Amused at his adversary's wit, Holmes is nonetheless annoyed that this third thread of the mystery has snapped.
On the morning of their departure, Holmes offers Watson some advice, suggesting that the doctor report facts only, and not conjectures. Holmes also announces that he has eliminated Desmond as a suspect, but that Watson should keep a close watch on all Henry's other intimates, including the Barrymores, Sir Henry's groom, the local farmers, Mrs. Stapleton and Mrs. Stapleton, and Mr. Frankland of Lafter Hall. Assuring that Watson has his gun and that Sir Henry will never go out alone, Holmes bids the group adieu.
On the trip, Watson chats with Mortimer and Henry, while the baronet admires the scenery of his birthplace. Soon, the group spots the fabled moorland, a gray, dream-like expanse. Observing Sir Henry's exultation, Watson decides that this New World traveler is indeed "of that long line of high-blooded, fiery, and masterful men," a good enough man to brave the Baskerville curse.
At the station, the group is met by a pair of gun-toting police officers, on guard for an escaped con, and by a set of Baskerville servants. The ride to the hall offers a beautiful scenic view, but always with the foreboding moor in the background. Asking about the armed guards, the group learns from the coachman that a dastardly criminal, Selden, the Notting Hill murderer, just recently escaped from prison. Sobered and silent, the party finally reaches Baskerville Hall.
As Barrymore and his wife introduce themselves and start taking down the baggage, Mortimer announces his intention to head home for supper. Once inside, Watson and Sir Henry learn of the Barrymores' intention to leave Henry's service as soon as he gets settled. Citing their sadness and fear at Charles' death, the Barrymores admit that they will never feel relaxed at Baskerville Hall. They also announce their intention to establish a business with the money inherited from Sir Charles.
Later on at dinner, Sir Henry says he understands his uncle's ill health and anxiety given the somber and scary aspect of much of the hall. Once in bed, Watson has trouble sleeping, and he hears a woman's sobbing.
When Holmes and Watson arrive at Henry's hotel, Holmes surprises us by lying to the bellhop to gain information about the guests who have checked in since Sir Henry. Sherlock also practices deceit, and his trickery clues us in to a maneuver he will pull when he suggests that he cannot go to Devonshire to handle the case. In enlisting Watson, Holmes plays his own game of disguised identity. Watson acts as Holmes' secret ears and eyes, thus Holmes will be there, through the conduit of Watson.
This section also depicts an interesting tête-à-tête between Holmes and Watson. When Holmes sends Watson up to Devonshire, he insists that Watson report just the facts. Though Watson revels in the trust and responsibility his friend affords him, it seems clear that Holmes does not give Watson enough credit. Then again, Watson is used to a much more abusive relationship with Holmes, so his expectations for their interactions are low. In "The Disappearance of Lady Frances Carfax" and "The Solitary Cyclist," Holmes criticized his friend's abilities with an acid tongue.
The shift in perspective engendered by Watson's new found authority allows the novel to present a series of clues, without a series of hypotheses based on the clues. Learning the clues before Holmes gives us a chance to try our hand at solving the mystery. Doyle often achieves the same effect in other novels because Holmes has a tendency to keep tightlipped about his plans and theories. However, in this novel, Watson has the opportunity to stumble along with us, suggesting theories that may or may not be true.
Once Watson finally arrives in Devonshire, the so-called Notting Hill murderer pops up out of nowhere. In a novel that satires the easy answer by providing obvious clues—the manuscript, the county chronicle—here is the easiest answer of all, a murderer on the loose. At the same time, it seems jarring and improbable to count the convict among the suspects because of the structure of the book. First, there is the arduous setup of a curse and hound. Second, there are still over one hundred some-odd pages left in the book. The murderer on the loose is dangled in front of us as a red herring, an unlikely candidate who just might be the culprit after all.