Don Quixote rushes into the battle and kills seven sheep before two shepherds throw stones at him and knock out several of his teeth. Sancho points out that the armies were really just sheep, prompting Don Quixote to explain that a sorcerer turned the armies into sheep in the midst of battle to thwart his efforts. Don Quixote takes more of the balsam, and as Sancho comes close to see how badly his master’s teeth have been injured, Don Quixote vomits on him. Nauseous, Sancho then vomits on Don Quixote. When Sancho tries to fetch something to clean them up, he discovers that his saddlebags have been stolen. Fed up, he vows to go home. Don Quixote says that he would rather sleep in an inn that night than in the field, and tells Sancho to lead them to an inn.
Sancho tells Don Quixote that their troubles stem from Don Quixote’s violation of his vow to keep a strict lifestyle until he finds a new helmet. Don Quixote agrees, noting that he had forgotten the vow, and blames Sancho for failing to remind him. As night falls, the two encounter a group of priests mourning as they escort the body of a dead man. When the priests refuse to identify themselves, Don Quixote knocks one of them off his horse, and the others scatter. Don Quixote tells the wounded priest that he has come to avenge injuries. The priest complains that Don Quixote has injured him without avenging anything.
Sancho steals goods from the priest’s mule. As the priest rides away, Sancho yells after him that this mischief was the work of Don Quixote, the Knight of the Sad Countenance. Pleased with his new title, Don Quixote asks Sancho where he came up with it. Sancho replies that Don Quixote’s face looks sad without its teeth. But Don Quixote asserts that Sancho so named him because a sage, who Don Quixote claims is dictating his life’s story, made Sancho think of this title. The two ride into a valley and eat dinner. They then have a conversation that Cervantes promises to record in the next chapter.
Don Quixote and Sancho hear a scary pounding. Sancho implores his master to wait until morning to investigate the sound, but Don Quixote swears to take on the unknown foe. Don Quixote tells Sancho to wait three days and then report his death to Dulcinea if he has not returned. Sancho secretly ties up Rocinante’s legs, immobilizing him, and Don Quixote concedes that since Rocinante seems unable to move, he must wait until morning to investigate.
Sancho begins telling a story. He tells each detail twice, and Don Quixote interrupts and commands him to tell the story only once. But Sancho says that this is the way stories are told in his homeland, so Don Quixote allows him to proceed. Sancho then vividly describes a shepherdess. Don Quixote asks whether he knew the shepherdess. Sancho says that he did not but that when he first heard the story it seemed so real that he could swear he had seen her. Sancho tells how a shepherd in love with this shepherdess had to cross a river with a herd of goats, and Sancho instructs Don Quixote to keep count while he tells the story of how many goats the character takes across. Midway through, Don Quixote tells Sancho to proceed with the story as though all the goats were already across. Sancho asks his master whether he knows how many goats have already crossed, and Don Quixote admits that he does not. Sancho ends his story, and Don Quixote cannot persuade him to tell the rest of it.
In the morning, Sancho and Don Quixote set off. Cervantes says that Sancho’s faithfulness convinces Don Quixote that Sancho is a good man. When the two arrive at a small bunch of houses by a river, they discover that the scary pounding comes from fulling-hammers, which are used to beat cloth. Sancho laughs, and Don Quixote hits him with his lance. Don Quixote says that Sancho must speak less to him in the future. Sancho accepts the order after Don Quixote tells him that he has left Sancho money in his will.