The scene opens on Edgar, alone in the woods. In his soliloquy, Edgar relates that he is aware of his outlaw status. Thus far, he has escaped capture by hiding in the "happy hollow of a tree" (II.3.2), but he knows that to remain free, he must mask himself.
Edgar lays forth a plan in which he will disguise himself as a Bedlam beggar, smearing dirt on his face and body, tying his hair in knots, and covering his body with a blanket. In this costume, he will be known as Poor Tom.
With Gloucester and Cornwall's men pursuing him, Edgar hides in the hollow of a tree. Believing that no one will look closely at a deranged beggar, Edgar covers himself with dirt, signs of injury, and a blanket as his humble attire. During Shakespeare's time, lunatics were assumed to be possessed by evil spirits and unable to feel pain, hence the self-mutilation as part of Edgar's disguise.
The choice to assume a mantle of madness provides Edgar with the perfect disguise, but the decision also parallels the loss of sanity that soon envelops Lear. The difference will be one of choice and invention: Lear will not be pretending. As Edgar clothes himself in madness, he becomes Poor Tom and ceases to be Edgar. The change is essential if Edgar is to move safely out of hiding while investigating the wrongful accusations against him. As Poor Tom, Edgar has a chance at survival. As Edgar, he is doomed.
Edgar ends his soliloquy with "That's something yet: Edgar I nothing am" (II.3.21). To survive under his new circumstances, Edgar must cease to exist. He quite literally becomes "nothing" in becoming Poor Tom. His previous life ceases to exist, to be nothing, and, as Tom, he is also nothing, since those who are mad exist in a world in which nothing is as it seems.
pricks any of various pointed objects, as a thorn, goad, and so on.