Mr. Squeers gets a drink and leaves Nicholas with the boys when they reach their last stop. Later, a pony-chaise and a cart come around. The boys get into the cart with the luggage, and Mr. Squeers and Nickleby get into the chaise.
Squeers informs Nicholas that the school, which is given the fancy name of Dotheboys Hall to impress Londoners, is not really a Hall at all. It is a one-storey house with several outbuildings, a barn, and a stable.
Squeers is angry at Smike, one of the boys at the school, when he doesn’t come promptly. Smike tells him that the missus allowed him to warm himself by the kitchen fire, and he fell asleep. Squeers denounces the missus as a fool, saying the boy would have been wide awake if he had stayed in the cold. He orders that the pony is not to be given any corn.
Nicholas feels depressed as his reservations are confirmed.
Mrs. Squeers greets her husband, telling him that the livestock is fine but one of the students is ill. She thinks this sickly child catches colds on purpose, and she thinks the best remedy would be a sound beating.
Smike looks longingly at the letters Squeers has brought that are addressed to some of the boys at the school. Though Smike is eighteen or nineteen years old, he is still forced to wear the same clothes he came to the school in as a young child. Smike asks Mr. Squeers if anybody asked about him. Squeers replies negatively. He reminds Smike that he has kept him all these years, despite the fact that his parents stopped paying after the first six years.
On the sentiment that Mr. Squeers opposes killing animals for their meat, the boys only get meat from animals that have died naturally. However, Mr. Squeers has no problem with animals being slaughtered for his dinner.
The Squeers make a bed for Nicholas, telling him that they’ll find a bedroom for him tomorrow after they figure out which place is the least full. They tell him he starts working at 7 a.m.
Nicholas plans to make the best of things for his family’s sake. As he is preparing for bed, the letter Noggs gave him falls out. It tells Nicholas that his father had been kind to Noggs. Noggs tells Nicholas that if he ever needs a place to stay in London, he can find Noggs at the address given. Tears fill Nicholas’ eyes.