At the palace, Theseus and Hippolyta discuss the tale the lovers have told about their night in the wood. Theseus comments that lovers, like madmen and poets, have "seething" brains. All three see things that don't exist because their imagination is stronger and more disordered than that of a reasonable person. Hippolyta, though, suspects the lovers' story must be something more, since they all had the same dream.
Theseus, always literal, dismisses the lovers' "dream," and fairies in general, as mere imagination. Hippolyta's response indicates not that Theseus is wrong, but that imagination can't be dismissed so easily. And the outcome of the play, in which "dreams" solved what reason couldn't, supports Hippolyta.
The lovers enter, and Theseus asks them what entertainment they'd like to see that night. Philostrate brings forward a list of the possibilities. Theseus is interested by a "tedious brief scene of young Pyramus and his love Thisbe, very tragical mirth" (5.1.60-61), and wants to know how a play can be so contradictory. Philostrate replies that the play is "tedious brief" because it's the shortest play he's every seen but still too long. It's "tragical mirth" because at the end of the play, when Pyramus kills himself, Philostrate cried, but only because he was laughing so hard.
Just as the lovers were unintentionally funny to the fairies, the laborers are unintentionally funny to their audience.
When Theseus learns that the players are simple manual laborers trying to do more than they are educated for, he decides to see it. He says that nothing "can be amiss when simpleness and duty tender it" (5.1.88-89). Though Hippolyta objects that she doesn't enjoy seeing men made to look silly when trying only to serve, Theseus replies that he can tell when a man who cannot speak for nerves means to welcome him, and that he'll reward the laborers for the spirit behind their actions, not their acting. He adds that it will be fun to watch their mistakes.
The laborers have long feared that Theseus won't be able to tell that they're acting, that he'll think, for instance, that Snug is really a lion. Theseus here says that he can always see through acting to the reality beneath, and extends this idea of acting to the everyday activities of one person greeting another. Life, Theseus implies, is full of plays within plays.
Quince comes onstage and delivers a prologue. It is completely ludicrous. At one point, Quince claims that the actors don't even exist: "All for your delight we are not here" (5.1.114). Though as Theseus, Hippolyta, and the lovers remark, the prologue would have been normal if it had been correctly punctuated. Quince continues with the Prologue, introducing the story and also the characters: Pyramus, Thisbe, the Wall, the Moonshine, and the Lion.
Quince's prologue establishes the rhythm of this scene. The actors will present their play while the audience (Theseus, Hippolyta, and the lovers) makes fun of it good-naturedly. This is just the same as the situation in the forest, except there it was the lovers who were being laughed at by the fairies.
Snout introduces himself as the Wall and tells the audience that the lovers will speak though a hole in the wall that he represents with his fingers. Theseus and Demetrius comment that the Wall is the wittiest wall they've ever heard speak.
It's interesting that Hermia and Helena never speak in this scene. Could it be because they've married, and have therefore accepted their husband's dominance?
Bottom enters as Pyramus, and curses the Wall for dividing him from his love. Theseus comments that since the Wall can talk it should curse him back. Bottom, overhearing, turns to Theseus and says that the Wall actually shouldn't respond, because it doesn't have any lines here. This speech, Bottom explains, is Thisbe's cue to enter.
Bottom, who was so worried that his acting would be so good that the audience wouldn't be able to tell that he wasn't really Pyramus, here breaks from the play and addresses Theseus directly, as himself.
Flute enters as Thisbe and approaches the Wall. Through a hole in the Wall (which is actually Snout's separated fingers), the lovers speak about their love using numerous incorrect references to classical mythology. Finally, they decide to meet at Ninny's tomb (which should be Ninus's tomb) to elope. Hippolyta states, "This is the silliest stuff that ever I heard" (5.1.222). Theseus responds, "If we imagine no worse of them than they of themselves, they may pass for excellent men" (5.1.211-212).
Hippolyta's right. The play is silly. But note how closely Pyramus and Thisbe resembles Lysander and Hermia's situation at the beginning of Midsummer. Are the laborers' mistakes any sillier than the lovers antics in the forest were? So the play is silly, but it also shows how silly lovers can be.
Snug comes onstage as the Lion, and explains that he is not really a lion at all and that the ladies shouldn't be frightened. Starveling enters and explains that the lantern he holds is moonshine, while he is the man in the moon. Theseus and the others make fun of the speeches.
Thisbe approaches Ninny's tomb but runs off and drops her mantle when the Lion roars. The Lion plays with the mantle, then departs. When Pyramus enters, he sees Thisbe's mantle on stage dirtied with blood that was on the lion's mouth. Thinking his love is dead, he gives a long speech, stabs himself, then proclaims himself dead in six different ways ("Now I am dead / Now I am fled / My soul is the sky…") before actually dying (5.1.290-293).
The misunderstanding and melodrama of Pyramus's death recalls the misunderstandings and melodrama of the lovers in the forest. The play makes the situation more ridiculous because it is so bad, which emphasizes just how good Midsummer must be, since it's similar situation came across as so funny and sublime.
Now Thisbe returns to the stage. She sees Pyramus lying dead. In despair she stabs herself, and dies. Theseus and the lovers continue to make fun of the play all the while. Finally, Bottom asks the audience if they would like to see an epilogue or a dance. Theseus says, "No epilogue, I pray you. For your play needs no excuse" (5.1.372-373). The laborers perform their dance, then exit.
Theseus's comment that a play needs "no excuse" echoes Bottom's that a dream needs no "expounding." An excuse destroys a play by revealing the unreality behind the acting. Expounding a dream destroys it by trying to make it rational.
Theseus says that it is almost "fairy time" (midnight), and therefore time to go to bed. All exit.
Once again, night is the domain of magic and fairies.
Everyone exits but Puck, who delivers an epilogue, in which he advises the audience that "If we shadows have offended" (5.1.440), they should just think of the play as if it was a dream.