Claude Estee makes a good living as a screenwriter, and his house is a replica of a well-known Southern mansion. Tod arrives at the party to find Claude standing on his porch, acting the role of a Southern gentleman, addressing his Chinese servant as if he were black. A small man with a nondescript body, Claude always dresses elaborately, as though in costume. Claude urges Tod not to leave the party early, as they will all be going to a brothel afterwards.
Tod greets Claude's wife, Alice. Alice introduces him to Joan Schwartzen, a tennis champ with a young face that clashes with her noticeably aged neck. Mrs. Schwartzen claims to "adore" brothels and "smut," and demands that Tod escort her over to the group of men who she is convinced are having a "dirty" conversation.
Tod and Mrs. Schwartzen stop briefly by the group of men, who are actually discussing the business of making films. They then walk around to the garden. Mrs. Schwartzen delightedly shows Tod the life-size rubber horse that Claude's wife has placed in the pool as a joke. Mrs. Schwartzen fakes anger at Tod and others who are not fooled by the horse because such people will not let her "cherish [her] illusions." Tod abandons Mrs. Schwartzen and returns to the porch where the men are still discussing film—specifically the rich but stupid men who run the film industry.
Tod takes Claude aside to say goodnight but his host will not let him leave. They go into the library and drink scotches. Claude tries to impress upon Tod the high quality of Audrey Jenning's brothel. Tod enjoys bantering with Claude, and claims that although Mrs. Jenning may be adept at presentation, he finds brothels just as depressing as all other "places for deposit," such as banks and tombs. Claude riffs off of Tod's imaginative connection and then Tod presents Claude with another image: that being attracted to a girl is like carrying an object that does not fit easily into your pocket. Claude happily riffs off of this image as well, and then reassures Tod that his creative connections are good, but that they would not film well because the general public wants "amour and glamour." The Chinese servant comes in to tell Claude that everyone is ready to go to Mrs. Jenning's.
Claude drives Tod down Sunset Boulevard to the call-house operated by Mrs. Jenning, who is a retired silent film actress. Claude explains that Mrs. Jenning does not keep her girls at her house; instead, she telephones them with assignments and takes half of their thirty-dollar fee to pay for her luxurious house and a chauffeur for the girls. Mrs. Jenning only takes wealthy, distinguished men for customers and insists on meeting them first. She is a refined woman who prefers to discuss matters of culture, such as literature.
Claude, Tod, and the rest arrive at Mrs. Jenning's. Mrs. Jenning takes them into a drawing room, where they take seats as a man works with a film projector. In response to Mrs. Schwartzen's question, Mrs. Jenning explains that they will watch the charming film "Le Predicament de Marie." While the man continues to work on the projector, Mrs. Schwartzen begins stomping her feet and whistling; the others join in the imitation of an impatient audience.
The film features a young maid and the family for whom she works. All the members of the family desire Marie, but Marie only desires the young daughter. As Marie prepares to go to bed, each of the family members comes to her room. She lets each of them in and then hides each of them as the next knock comes. After they are all in the room, hidden, another knock comes. Just before the identity of the final knocker is revealed, the film projector jams. The group heckles the young man in charge of the projector.
Tod leaves the room and heads to the patio for air. After coming back inside, he inspects several of the rooms, noticing in one of them a glass cabinet filled with tiny dog figurines. Tod hears a girl's voice singing and recognizes the voice—it is Mary Dove, one of Faye's best friends. Tod wonders if Faye works for Mrs. Jenning as well, because if so, he could have her for only thirty dollars. Tod returns to the drawing room for the rest of the film.
The bulk of The Day of the Locust focuses on the underside of the Hollywood population in the 1930s: untalented movie extras, prostitutes, bookies, and unemployed vagrants. Chapters 4 and 5 give us our only glimpse of a more well-to-do lifestyle and the people who live it&mdsah;people with whom Tod could clearly be socializing, but typically does not, for some reason.
Claude Estee and his house and party continue the theme of masquerade. Claude pretends to be a Southern gentleman to match the style of his Southern mansion, and Mrs. Estee has had a life-sized rubber horse put into their pool for the amusement of the guests. Though seemingly comic, these illusions have a sinister edge. Claude's role-playing use of the epithet "you black rascal" becomes even edgier and more loaded because his servant is actually Chinese. The reproduction of a dead horse, lying with its legs up and a "distended belly" on the bottom of the pool, is a horrific version of a party trick. The most sinister element of the party, however, is Mrs. Schwartzen's constant shrill demands for such ghastly illusions. Mrs. Schwartzen pretends to become angry or begin crying when others dispel her playful expectations, but her acting is over-the-top, making her garish and aggressive.
Mrs. Schwartzen's fascination with seedy sexuality adds to the sort of perverse, near animalistic sexual desire that hovers around the women introduced thus far in the novel. Interestingly, the animalistic desire and near violence is never directly attributable to the women themselves. Vulgarity is introduced with Abe Kusich's sexual jokes and talk about his old girlfriend in Chapter 2. Though Tod feels violent desire for Faye, Faye herself is not possessed by perverse sexuality—more vaguely, she represents it, with her "swordlike legs." Here, too, Mrs. Schwartzen seems to be playacting a desire for perversion. This act feeds off of those around her, especially the audience at Mrs. Jenning's. The women we have seen so far, then, act as conduits of or containers for animalistic sexuality on the part of men, rather than the sources of such sexuality themselves.
Tod's conversation with Claude Estee at the end of Chapter 5 indicates the similarities between the two men. Both hold themselves slightly superior to most Hollywood people and the audiences of Hollywood films—though Claude is not above trafficking in Hollywood film and producing material suitable for the illusion-craving audiences. Claude and Tod trade metaphorical jokes—intellectualized, ironic entertainment that reaches the level of metaphor and distinguishes them from the entertainment of mass culture, which involves only sincerity and straightforward plot lines. Tod admires Claude because Claude's particular type of humor allows him to engage himself with Hollywood and its circles, yet maintain some level of distance and superiority in the guise of "moral indignation." Tod's admiration again points back to his own painting and his attempt to use this painting to maintain the distance of critical study between himself and the Hollywood atmosphere. This distance is reinforced by moments such Tod's self-removal from the pornographic film and mock riot at Mrs. Jenning's. In turn, the distanced positions Claude and Tod enjoy invite a connection to the role of audience member or commentator.
Tod's analysis of Claude's humor speaks to another running element of The Day of the Locust: comedy. The novel is not exactly funny, more often thorizing about humor rather than trying to create it. The laughter within the novel is not the free laughter of innocent enjoyment. Tod's first laugh—at the flimsy architecture of Hollywood in Chapter 1—does not even occur, as it is stifled by his recognition of the pathetic impetus for the architecture. His second laugh—in Chapter 3 at his own dramatic language describing Faye's violent allure—is meant to be self-critical. Laughter continues to figure through the novel, not as a simple expression of enjoyment, but as a tool of confrontation and an expression of ulterior motives or desires.