Mrs. Squeers is upset that she can’t find the spoon she gives doses of brimstone and treacle with. She tells Nicholas they give this medicine to the boys to keep them from ailing and to diminish their appetites. Smike suggests that the spoon is in her pocket, which is the case. She then boxes Smike’s ears for suggesting it after she explicitly said she didn’t have it.
Squeers praises his wife to Nicholas as a constant woman who does more for the students than most mothers do. The couple agrees that their goal is to get as much out of every boy as possible.
The school room is bare and dirty. The furniture is rickety and ink-stained. Most of the window panes are missing and covered with paper.
Nicholas’ hopes of doing some good fade when he sees the boys. The children are pale, exhausted, half-starved, and stunted in growth. Most have deformities which repulsed their parents into abandoning them at a place where they never have to see them. The eyes reflect dejection, loneliness, and malice.
Mrs. Squeers administers the brimstone and treacle. The clothes of the new arrivals have been taken away from them and given to the son of Mr. and Mrs. Squeers. The new students have been put in old, ill-fitting clothes.
They eat a meager breakfast. The students are silent and motionless, lacking the energy to move. Master Squeers treads on their toes.
Mr. Squeers shows Nicholas how they teach the children. The children learn their vocabulary. After they have learned the meaning of a word, they perform the action it represents. They learn the word horse, and then Mr. Squeers orders them to tend to his horse. He then has Nicholas listen to another group of boys read their lesson. This is followed by lunch.
Squeers calls the boys together to tell them he has just returned from London. The boys feign delight that he has came back. He tells the few students who have parents who are interested in them that he told their loved ones that they were doing marvelously. The parents were so pleased, they saw no reason to remove the boys from the school. Those few students look upset.
Squeers calls up one boy whose father came up short in payment. Disgusted by the warts on the boy’s hand, he canes him. He then puts him out the door when he doesn’t stop crying.
The few boys who get letters, Squeers reads them out loud. Any money that is sent with them is confiscated. Another boy is punished for being discontented at the school. Any clothing that is sent is given to the Squeers’ son.
Nicholas is depressed by what he has witnessed. He loathes being an accomplice to it. However, he writes a cheerful letter to his mother and sister. He doesn’t want to anger his uncle, and he consoles himself into thinking he might be able to help the situation. He does worry about what Kate’s situation will be like, for her beauty would make a bad place even worse. However, he believes that his uncle tricked him out of dislike…but he hopes that the uncle is softer in his feelings towards his sister, and he won’t do the same thing to her.
Smike comes up to the fire, expecting Nicholas to beat him away. When he doesn’t, Smike bursts into tears, grateful for Nicholas’ compassion.
Smike tells Nicholas that the boy who died at the school saw friendly faces talking to him around his bed. However, Smike doesn’t believe anyone will talk to him on his death bed.