At breakfast, McMurphy teases Billy Bibbit, calling him Billy Club Bibbit with a legendary 14-inch penis. He invents a story about Bibbit picking up two prostitutes — "twitches" — and shocking one of them with the prodigious size of his member. The tale embarrasses Bibbit, but also gives him a sense of pride at being the hero of such an outlandish adventure. McMurphy further entertains the Acutes during breakfast by taking bets that he can shoot butter patties at the mess hall clock.
Later in the morning, McMurphy asks Nurse Ratched if she can turn down the music in the ward. Ratched tells him that he's being selfish, and that the music's volume is adjusted for the ward's hard of hearing. McMurphy suggests that he and the Acutes be allowed to play cards in another room where the music can't be heard. She rebuffs his idea, but McMurphy discusses it with Doctor Spivey, who believes the idea has merit. He also suggests that the ward host a carnival, something Chief remembers Max Taber suggested in the past. The additional room for card playing is approved against Ratched's wishes. Chief relates that McMurphy has won a battle, but is certain he'll lose the war.
McMurphy's behavior is becoming contagious among his fellow patients, invigorating them and endearing him to them. He is able to discern the perceived weaknesses of his new friends and turn them into their strengths. For example, he recasts Billy Bibbit as a swaggering ladies' man, and Chief as a large, self-confident individual.
Chief also details the escalating battle of wills between McMurphy and Nurse Ratched. At first flustered by McMurphy and his newfound popularity with the Acutes, Ratched is beginning to regain her controlled composure. This indicates to Chief that she's waiting for McMurphy to make a mistake before she makes her next move.
twitch(es) a slang expression for a woman of easy virtue; a prostitute.