When she finishes her story, Dorotea asks her three listeners where she could spend her life in anonymity and seclusion. Cardenio reveals his true identity, and tells her that he and she could still marry the people they desire, since they are both still free: Cardenio can still marry Luscinda, and Dorotea can still marry Don Fernando. The priest invites them all to restore their strength in their home village, and the barber tells them the strange tale of Don Quixote and Sancho Panza and describes their plan for restoring Quixote to sanity.
These beautiful, high-born characters present such a contrast to Quixote and Sancho that they seem like fragments from a separate literary work. They are utterly high-minded and serious, while Quixote and Sancho are often comical, earthly, and absurd. Cervantes takes great care to humanize characters from many different social strata. When he places the two different kinds of stories side by side, he sets high-born, romantic characters and crude, physically flawed, comical characters on equal footing.
In the meantime, Sancho returns and tells them he found Quixote hungry, weak, and unwilling to return to the village before he proves his courage. Sancho is anxious that Quixote will never get around to becoming an emperor and giving him an island. Dorotea offers to play the damsel in distress in the charade, since she has read many books of chivalry and knows all the rules. She takes out a beautiful dress and transforms herself back into a lady. The priest tells Sancho that Dorotea is the princess Micomicona, who has come from far away to seek help from the famous knight Quixote. She needs Quixote to defeat an evil giant that has seized her kingdom.
The priest and the barber have so little faith in Quixote’s worldview that they fail to recognize that Dorotea is just the sort of damsel in distress they need – the sort of person Quixote wants to help. They ask her to play a damsel in distress, to pretend to be what she is already. Dorotea and the other three characters of this tangled subplot represent a kind of compromise between Quixote’s imaginary world and the real world of the novel.
Dorotea, the priest, and the barber go to find Don Quixote. Dorotea falls on her knees and begs him to restore her to her rightful place as princess of an African kingdom. Don Quixote readily agrees, promising not to involve himself in any other adventures in the meantime, and the company sets off. From some distance away, the priest disguises Cardenio by cutting off his beard and dressing him in the priest’s cape. The priest stops Don Quixote and begs him for assistance also; Don Quixote recognizes his friend and agrees to help, feeling some confusion. Dorotea tells him that the way to the kingdom of Micomicón lies through Quixote’s village. The priest mentions that he and the barber were robbed on the road by criminals from a chain-gang. Quixote blushes at this story and asks for no more explanations.
The priest’s determination to weave an intricate web of lies contrasts with Quixote’s perfect honesty and gullibility, his confidence that the world is single-layered and straightforward. The priest’s lie about the robbery guilts Quixote into agreeing to all the priest’s requests, but it also forces Quixote to face the consequences of his actions. The ethical value of each action is more complicated than he’d thought.