The scene shifts to the Dedalus home, where Stephen has returned from boarding school for Christmas vacation. This is the first Christmas dinner during which the young Stephen is allowed to sit at the adult table. The Dedalus family, Dante, Uncle Charles, and a friend of Mr. Dedalus named Mr. Casey are waiting for the food to be brought in. Mr. Dedalus and Mr. Casey chat about an acquaintance who has been manufacturing explosives. The turkey is brought in, and Stephen says grace before the meal.
Mr. Dedalus speaks approvingly of a mutual friend who, by confronting a priest directly, has criticized the involvement of the Catholic Church in Irish politics. Dante strongly disapproves, saying that it is not right for any Catholic to criticize the church. The disagreement soon turns into an angry dispute. Dante quotes the Bible, saying that priests must always be respected. She feels that, as Catholics, it is their duty to follow orders from their priests and bishops without questioning them, even when those orders might be opposed to the Irish patriots' cause.
Stephen watches the dispute with bewilderment, not understanding why anyone would be against priests. He believes Dante is right, but remembers his father criticizing Dante because she used to be a nun. Mr. Casey tells a story of being accosted by an old Catholic woman who had degraded the name of Parnell and the name of the woman with whom Parnell had an adulterous affair. Casey had ended up spitting on the old woman. This anecdote amuses the men but infuriates Dante, who cries that God and religion must come before everything else. Mr. Casey responds that if Dante's words are true, then perhaps Ireland should not have God at all. Dante is enraged and leaves the table, and Mr. Casey weeps for his dead political leader Parnell.
Back at school after Christmas vacation, Stephen listens to a muted conversation between Wells and several other students. They are talking about a couple of boys who fled the school for wrongdoing and were later nabbed. Wells believes the boys stole wine from the school's sacristy. The other boys fall silent at the horror of this offense against God.
Athy gives a different account of the boys' crime. He says they were caught "smugging," or engaging in some sort of homosexual play. Stephen reflects on this suggestion, recalling the fine white hands of one of the students, and thinking also of the soft ivory hands of his neighbor Eileen Vance. One boy, Fleming, complains that all the students will be punished for the wrongdoing of two. Fleming suggests that they could mount a rebellion against such an injustice.
The boys are summoned back into the classroom. After the writing lesson, Father Arnall begins the Latin lesson. Fleming is unable to answer a question and the prefect of studies, Father Dolan, pandies him, or lashes his hands. Afterward, the prefect notices that Stephen is not working and demands to know why. Father Arnall tells Father Dolan that Stephen has been excused from class work because his glasses are broken and he cannot see well. Stephen is telling the truth, but the unbelieving prefect pandies him as well.
Later, the boys discuss the incident and urge Stephen to denounce the prefect to the rector. Stephen is reluctant. Finally, he summons the courage to march down the long corridors filled with pictures of saints and martyrs toward the rector's office. Stephen tells the rector what happened, and the rector says he will speak to Father Dolan. When Stephen tells the other boys he has reported on Dolan to the rector, they hoist him over their heads as a hero.
The Christmas dinner dispute introduces the political landscape of late nineteenth-century Ireland into the novel. This is the first Christmas meal at which Stephen is allowed to sit at the grown-up table, a milestone in his path toward adulthood. The dispute that unfolds among Dante, Mr. Dedalus, and Mr. Casey makes Stephen quickly realize, however, that adulthood is fraught with conflicts, doubts, and anger. This discussion engenders no harmonious Christmas feeling of family togetherness. Rather, the growing boy learns that politics is often such a charged subject that it can cause huge rifts even within a single home.
Dante's tumultuous departure from the dinner table is the first in a pattern of incidents in which characters declare independence and break away from a group for political and ideological reasons. Indeed, the political landscape of Ireland is deeply divided when the action of the novel occurs. Secularists like Mr. Dedalus and Mr. Casey feel that religion is keeping Ireland from progress and independence, while the orthodox, like Dante, feel that religion should take precedence in Irish culture. The secularists consider Parnell the savior of Ireland, but Parnell's shame at being caught in an extramarital affair tarnishes his political luster and earns him the church's condemnation. This condemnation on the part of the church mirrors Stephen's shame over expressing a desire to marry Eileen Vance, who is Protestant. On the whole, however, Stephen's reaction to his family's dispute is sheer bafflement.
These chapters also explore the frequently arbitrary nature of crime and punishment. The fact that the boys in Stephen's class at Clongowes know that they will all be punished for the transgressions of the two caught "smugging" indicates that they are accustomed to unfair retribution. Furthermore, none of the instances of wrongdoing mentioned so far in the novel have been crimes of malice: neither Stephen when he wishes to marry Eileen, nor the boys caught in homosexual activity, nor Parnell caught in a relationship with another woman, demonstrates any overt ill will toward others. None of them robs, kills, or wishes harm directly upon another, yet they are all punished more severely than they deserve. Joyce explores this idea of undeserved punishment explicitly when Stephen is painfully punished for a transgression that he has not committed. When Stephen later defends himself and denounces the punishment as unfair, he acts as a representative of all the others who are unfairly punished.
There is great symbolic importance in the scene in which Stephen's peers lift him up over their heads and acclaim him as a hero, as it suggests a heroic side of the young boy that we have not seen before. Stephen's summoning of the courage to denounce Father Dolan's injustice is a moral triumph, rather than a more conventional heroic triumph in sports or fighting. Joyce highlights the difference between these two kinds of heroism in the pictures of martyrs that Stephen passes on his way to the rector's office. His walk among the images of upright men suggests that he may be joining their ranks, and his moral victory foreshadows his later ambitions to become a spiritual guide for his country. The role of hero does not necessarily come easily to Stephen, however. His schoolmates lift him up "till he struggled to get free," suggesting that heroism is a burden associated with constraints or a lack of freedom. Significantly, Stephen's heroic role does not ensure any new feeling of social belonging: after the cheers die away, Stephen realizes that he is alone. Joyce implies that becoming a hero may not bring an end to Stephen's outsider status or to his solitude.