Musing on the mysteries of the case, Watson dismisses the supernatural explanation but admits that his common sense offers no obvious solution. Where might a living and breathing hound hide by day, and who is the mysterious shadow out on the moor? Watson determines to find out what this man might know and whether he is the same person who provided the warning back in London.
Meanwhile, Sir Henry argues with Barrymore over the chase of his brother-in-law, Selden. Watson and Henry worry that the man is a public danger. Nonetheless, Barrymore assures them that Selden is just biding his time until a ship arrives for South America, and that he will not commit any more crimes. Barrymore's betters agree not to tell the police, and Barrymore thanks them by offering another clue. Apparently, Sir Charles went to the gate on the night he died to meet a woman, and Barrymore tells of his wife's discovery of a charred letter, signed L.L., requesting the late-night meeting.
The next day, Watson learns from Mortimer that Laura Lyons, daughter of "Frankland the crank," lives nearby in Coombe Tracey. Mortimer goes on to explain that Laura married an artist against her father's will and that both husband and father have since abandoned her. In the meantime, both Stapleton and Sir Charles have come to her aid by offering her alms.
As for the silhouette on the moor, Watson learns from Barrymore that Selden has seen him, too. He appears to be a gentleman, and he lives in one of the Neolithic huts along the moor, getting his food from a young boy.
Deciding that an informal visit might be the most productive, Watson leaves Sir Henry at home and heads for Coombe Tracey. At Laura Lyon's apartment, Watson meets the beautiful brunette and announces his interest in the matter of Sir Charles' death. Suspicious but finally cooperative, Laura admits that Sir Charles supported her financially, and that she wrote to him once or twice. But when Watson presses the issue, she claims to have had very little to do with him personally, and that it was Stapleton who told him of her situation.
Watson goes on to mention the burned letter, and Laura finally admits to having written it. The lateness of the hour and the strangeness of the location, she claims, resulted from her just having heard of Charles' imminent departure and her fear that a late-night meeting might look bad. When Watson asks what happened that night, Laura claims to have missed the appointment, but she refuses to say why. All she will disclose is the letter's content: an appeal for alms from Sir Charles to get her out of a bad marriage. Laura also adds that in the interim, she has gotten help from someone else.