Revealing that the puppeteer is Gines de Passamonte in disguise and with a new profession, the author tells somewhat of how the rogue earns his livelihood; in fact, the description is that of a classic Spanish picaro. Back to Don Quixote, the author tells of the battle that the brayers are awaiting. The assembled fighters greet Don Quixote, assuming he is a champion for their cause, and listen to his oration. The knight declares that men should go to war, not for small causes, but for large ones, such as the defense of the Catholic faith or the defense of Spain or the defense of one's good name. While he pauses, Sancho takes up the speech. It is a silly fancy, he says, to be ashamed of being able to bray. As a child, he himself was an excellent brayer. The foolish Sancho, then, opening his mouth, holding his nose, makes such a loud braying that the townsmen think he is mocking them. As they begin to collect stones, Don Quixote sensibly spurs Rosinante and gallops out of danger, but Sancho receives a good beating. After this, the villagers leave the field of battle, relieved that the opposing townsmen did not show up.
Chapter XXVIII faithfully transcribes a conversation between Don Quixote and Sancho Panza regarding salary. As the squire pursues his request, the Don politely asks how many months of a monthly wage is owing. Sancho replies that twenty years have passed since he has been promised a government of an island. Gladly will he pay, says Don Quixote, the better to get rid of such a mercenary varlet. Furthermore, he says, "Thou perverter of the laws of chivalry that pertain to squires, where didst thou ever see or read that any squire to a knight-errant stood capitulating with his master, as thou hast done with me, for so and so much a month?" He continues to scold until tears well up in Sancho's eyes, and then he begs humble pardon; the two friends are once more amicably settled in their differences.
At the banks of the River Ebro, where they have now arrived, Don Quixote spies a little boat moored to the shore. He is convinced that "this boat lies here for no other reason but to invite me to embark in it," and, with Sancho trembling with fear, they enter the boat and begin to drift. Exclaiming at the distances they travel, Don Quixote tells his squire that they are approaching the "equinoctal line," but Sancho points out he can still see Dapple and Rosinante tied to the tree on shore. Slowly they drift toward a water mill, and Sancho is fearful that they will be sucked into the rapids and flung down the falls. But the millers, all covered with flour, rush out with poles to arrest the drift of the boat. Don Quixote slashes at these goblins with his sword. The boat overturns; knight and squire are rescued from the water by some millers. Don Quixote offers the angry fisherman payment for the ruined boat provided that the evil company release the prisoner in the castle dungeons. The millers are mystified, and the knight, assuming it is a task for some other brave paladin to free the captive, returns with Sancho to their beasts.
As knight and squire emerge from the wood, they see a noble hunting party. Leading her attendants, the lovely lady with a goshawk appears to be a person of high quality. Don Quixote dispatches Sancho to greet the fair huntress in the name of the Knight of the Lions. Receiving his embassy courteously, the duchess begs them both to be guests in her castle nearby. Meanwhile, she sends a message to her husband the duke to inform him of their strange visitors. Since both have read the first part of the History of the Ingenious Knight, they are eager to find diversion from their guests. The duke and duchess are as much entertained by the impertinences of Sancho as by the extravagances of the knight.
Entering the castle courtyard, Don Quixote is welcomed by all the servants with burlesque pomp and goes into the dining room with his shoulders draped in a red mantle. Recovering quickly from this royal attendance, Sancho's first consideration is his ass, Dapple, and he insults a waiting-woman by asking her to make sure that the beast is comfortably settled. The duchess overhears the argument and chides Sancho gently, promising to take as good care for the ass as for the master. While they prepare for dinner, Don Quixote scolds Sancho for his impertinence and orders him to be more discreet in further conversations. The knight marches in to dinner and accepts the place of honor at the duke's table. The ducal clergyman, when he realizes that the knight is none other than the hero of the famous history, sternly lectures him. "Hark ye, Goodman Addlepate, who has put it into your head that you are a knight-errant, that you vanquish knights and robbers? Go, get you home again, and look after your children if you have any, and what honest business you have to do, and leave wandering about the world, building castles in the air and making yourself a laughing-stock to all that know you, or know you not."
Eloquently, nobly, Don Quixote answers the uncivil parson, whose words echo the sentiments of the hidalgo's niece, Antonia. "A fine world 'tis truly," he says, "when a poor pedant, who has seen no more of it than lies within twenty of thirty leagues about him, shall take upon him to prescribe laws to Knight-Errantry and judge of those who profess it." He goes on to say that his only wish is to right wrongs and do good in the world, and surely no one can denigrate these motives. When the clergyman turns his anger to Sancho, the loyal squire replies, using proverbs, of course: "Keep with good men and thou shalt be one of them. I am also one of those of whom it is said, 'Not with whom thou wert bred, but with whom thou hast fed;' as also 'lean against a good tree, and it will shelter thee.' I have leaned and stuck close to my good master, and . . . now he and I are one; and I must be as he is . . . and so he live and I live, he shall not want kingdoms to rule, nor shall I want islands to govern." The parson leaves the dining room in anger, and after dinner, the mischievous servants play their own trick on Don Quixote by inventing a washing ritual to make him look ridiculous. To prevent insult to his guest, the duke also demands a washing, although he can barely repress his laughter. While Don Quixote now goes for an afternoon sleep, Sancho agrees to entertain the duchess until the heat of the day has passed.
Punctuating his conversation with proverbs, Sancho relates the truth about Dulcinea's enchantment, describing the whole incident with the three country wenches. The duchess suggests, however, that Dulcinea is truly enchanted and that the magicians who persecute Don Quixote have put this story into Sancho's head. When they shall all see Dulcinea in her true shape, Sancho shall see how mistaken he is. Believing everything she says, Sancho is very confused. The duchess now begs him to tell her the story of Montesinos Cave, which he does. She further confounds Sancho by pointing out that if his master saw the country wench in the cave, then doubtless Dulcinea is victim to a powerful enchantment. Then the conversation turns to a discussion of Sancho's governorship, which the duke had previously promised him, and the duchess, very much amused, finally dismisses the bewildered squire.
The duke and duchess resolve to further entertain themselves with Don Quixote's extravagances by devising adventures for him. On an appointed day, they organize a boar hunt, presenting Sancho with a green hunting suit for the occasion. When the wild beast actually appears, Sancho is so terrified that he climbs a tree and later is found by the rest of the party as he hangs upside down with his shirt caught on an overhanging bough. It is now getting dark in the woods, and all are amazed to hear tremendous noises of battle, trumpets, Moorish cries, drums. A costumed rider gallops past, declaring that he is the devil in search of Don Quixote de La Mancha. Six bands of necromancers are coming this way, he says, conducting the peerless Dulcinea enchanted in a triumphant chariot.
Montesinos, Dulcinea's attendant, comes along to give information how she may be freed. More dreadful noises resound through the woods, lights flicker, and Sancho faints from fear. Finally a procession of oxcarts appears, each draped as in mourning, each carrying an old man bearing the name of an ancient sage. The carts stop, and sweet music is heard advancing from the distance.