While Don Quixote and Sancho spend the night under some trees, another knight and another squire stop to rest in the same place. The stranger sighs and laments about his mistress, Casildea de Vandalia. Desirous to learn more about Dulcinea's rival, Don Quixote begins to converse with the newcomer. Meanwhile, the two squires have retired to a separate place, where they can discuss their common interests.
The two squires compare the foolishness of their masters. The stranger says his knight is more of a knave than a fool, and Sancho says, "Mine is not like yours then; he has not one grain of knavery in him . . . he does all the good he can to everybody; a child may persuade him it is night at noonday, and he is so simple I can't help loving him." After eating and drinking together and chatting amiably, the two squires fall asleep.
The strange knight boasts of having conquered even the great Don Quixote de La Mancha, of having wrung from him a confession that no one excels the beauty of his mistress Casildea. At this, the amiable conversation becomes a parley for a duel. The newcomer dresses himself in a glittering coat set with mirrors, the squires are roused, and the combatants mount and begin to fight. The Knight of the Mirrors loses the battle and reveals under his visor the visage of the bachelor Samson Carrasco. His squire (after a fake nose fell off) looks exactly like Thomas Cecial, Sancho's neighbor. Don Quixote assures the bewildered Sancho that some enchanter has transformed the faces of their opponents in order to gain mercy from his anger.