The curate tries to tell the troopers that Quixote is insane, and they will have to release him anyway. The trooper says he canont be the judge of that. He is following orders. However, the curate’s arguments and Quixote’s bizarre behavior finally convinces the troopers there is no point in arresting a madman. The curate pays the other barber for his basin. He also settles the damages with the landlord, and Don Fernando pays that bill. Peace is restored.
Don Quixote believes it is time to continue their journey. He urges Dorothea to continue, for delaying brings no profit and may be detrimental to their success. There may be spies working for the giant that are reporting back to him. Dorothea agrees.
Quixote orders Sancho to prepare their mounts. Sancho doesn’t believe Dorothea is a queen due to the way she behaves around Don Fernando. Dorothea is embarrassed by his words. Quixote is enraged. He accuses Sancho of a vulgar imagination. He dismisses him as his squire.
Dorothea calms Quixote, saying Sancho must have been fooled by an illusion created by the enchanted castle. Quixote admits that must be be the case, for Sancho isn’t one to slander someone’s name. Dorothea tells him to restore Sancho back as his squire. Quixote pardons Sancho. Sancho believes the castle is enchanted, though he doesn’t believe he was tossed into the air by specters like Quixote does.
The curate and barber devise a plan to take Quixote back to his village without requiring Dorothea and Fernando to lure him there. They have a waggoner build a cage. The troopers and landlord disguise themselves and seize Quixote while he is sleeping. They tie him up. Sancho recognizes the people but remains quiet. The barber tells Don Quixote that he is to be taken to Dulcinea so he can wed her. He tells Sancho not to be forlorn, for he will be rewarded. Don Quixote is placed in the cage.