During the search for Marcella, Don Quixote and Sancho rest and eat in a pleasant meadow. Their beasts graze nearby. Meanwhile, some Galician (Yanguesian) carriers have rested their herd of mares in the same grazing area, and Rosinante, usually so chaste and modest, begins to pay gallant court within the herd. The carriers are furious and with their staves and poles beat the poor horse until he sinks to the ground. Don Quixote rushes to the rescue with Sancho, despite his better judgment, at his side. The odds are two against twenty. The carriers have soon beaten the knight and squire so badly that they (the carriers) flee with their mares rather than be accused of murder.
Still too sore to move, Don Quixote and Sancho have a long discussion, the squire maintaining a position of absolute pacifism, while his master upholds the nobility of violent defense. They manage at last, however, to limp their way toward an inn, which the knight declares is a castle.
The night spent in this unaccommodating inn climaxes their misfortunes. A lusty mule carrier who sleeps in a nearby chamber wakefully awaits the visit of the deformed servant of the innkeeper, Maritornes. Too sore to sleep, Don Quixote has imagined that the daughter of the powerful lord who owns this castle has fallen in love with him and has arranged a tryst. Maritornes is punctual but must pass by the knight's couch on her way to the mule carrier. Don Quixote grabs her, whispering that despite her loveliness, charm, and generous heart, his affections belong to his beloved mistress, Dulcinea. The muleteer, enraged, grabs a cudgel and smacks Don Quixote first on the jaw, then tramples him with his great feet. The bed falls in with such a noise that the innkeeper awakens. Blaming Maritornes, he rushes upstairs to punish her. The servant hides next to the sleeping Sancho, who is terrified to find a lump in his bed. He flails around as if in a nightmare, and Maritornes begins to hit him in return. With the aid of the innkeeper's light, the mule carrier now beats Sancho, while the landlord attacks Maritornes. Then, when the lamp goes out, a police officer, lodging at the inn, charges into the fray. He grabs the senseless Don Quixote and discovering no response shouts "Murder!" At this, everyone quietly desists, and each slinks back into his own bed.
When the police officer returns with a light, he finds Don Quixote conscious, but bruised. The knight insults him, mistaking him for the cause of all the trouble, and the officer gets so angry that he hits him over the head with the lamp. To relieve his pains, the Don orders the ingredients for his special balm and swallows the preparation. After violent nausea, he feels quite restored, and Sancho then drinks what is left in the pot. He, on the other hand, suffers such dreadful reactions that he is weaker and more miserable than ever when the attack is over. His master is ready to leave, however, and saddles their beasts, giving the innkeeper a gracious speech of thanks for his hospitality. "Where is my payment?" asks the landlord, but the distracted knight cannot understand that he is anything but a guest at whichever castle he stops at. He marches off, leaving Sancho to continue arguing with the innkeeper. At this point, some stout jolly fellows in the courtyard seize this opportunity for a jest. They lay Sancho in a blanket and toss him high in the air many times before allowing him at last to rejoin his master outside the gate.
Sancho is so unhappy about the blanketing that he would like to go home. Just then, Don Quixote spies a large cloud of dust in the distance. "A prodigious army is approaching," he says, "And this day shall not only see a change in our fortunes, but shall see exploits of mine that shall be forever part of history." But Sancho sees two dust clouds that his master interprets as two armies about to attack one another. He describes giants and crests and heraldic symbols that Sancho cannot discern for the dust. As the two armies approach, however, Sancho hears the bleating of sheep and warns his master too late that the hosts are but separate flocks crossing the path. Don Quixote charges into the midst, scattering, trampling, and wounding many animals. The shepherds respond to the attack by expertly using their slingshots. Don Quixote is hit by so many rocks that he is quite unconscious when Sancho arrives to help him. Toothless and sore all over, the knight curses the necromancer who has robbed him of victory by changing the armies into a flock of sheep.