The duke and duchess arrange a substitute for the challenge--as the young man Don Quixote had challenged had already fled to avoid having to fulfill his promise of marriage. A Gascon lacquey named Tosilos fills in. The duke tells Quixote that the young man has accepted the challenge, but he maintains that Dona Rodriguez's daughter is lying. Don Quixote is excited by the prospect of the challenge and waits impatiently for the day it is to occur.
Meanwhile, Sancho is returning to the estate of the duke and duchess. He comes across pilgrims begging for alms. As he doesn’t speak their language, he gestures that he doesn’t have money. One of them embraces Sancho, identifying himself as Ricote, the shopkeeper in his village. Sancho asks why he has returned, for he’ll be in a lot of trouble if he is discovered. The man feels safe enough traveling as a pilgrim. Ricote was banished for being a Moor.
Sancho dines with the pilgrims. He forgets his prior troubles. Ricote tells him that he had left beforehand to secure a place for his family in another country. He understood the king’s reasons for expelling the Moorish population from Spain. Only a few Moors practiced Christianity. Most pretended to convert. The others were also plotting against the king.
However, they didn’t find any welcome or compassion in other countries. Ricote missed Spain, so he returned. He had traveled quite a bit. The pilgrims enjoy food , drink, travel,and wealth. He returned to collect treasures he had hidden. He will then rejoin his family.
Sancho tells Ricote that his family was taken off by his wife’s borther, and the wealth they had was seized by the inspectors. Ricote said he told no one where he hid the nest egg. If Sancho helps him find it, he’ll give him a portion. Sancho refuses to help him, for he is still an enemy of the king.
Sancho tells Ricote about his governorship. All he got from it was the knowledge that he isn’t capable, that it is tiring work, and you starve to death under physicians looking after your health.
Sancho promises not to reveal Ricote, but he still refuses to help him despite the other man’s entreaties. Ricote asks if Sancho was there when his family left the village. Sancho says he saw Ricote’s daughter say goodbye. They figured a man in love with her would kidnap her. He hasn’t appeared since she has left. Many wanted to kidnap Ricote’s daughter for her beauty, but they feared the king too much.
Sancho bids farewell to Ricote.