Aboard the Indomitable, Billy served in the foretop, with other young men managing the smaller top sails. This duty was relatively leisurely when compared to those below. Billy was always alert and dutiful, because of the first punishment he witnessed on the Rights-of-Man. After seeing a misbehaving young sailor getting whipped harshly, Billy resolved never to get into trouble himself.
Billy's reaction to witnessing the whipping shows the potential effectiveness of the naval justice system based on punishments. But this system of justice will later be called into question by the peculiar events of this story.
But on the Indomitable, Billy repeatedly found himself in trouble involving minor infractions like stowing his bag incorrectly. Troubled by this, Billy went to an older sailor for advice, known as the Dansker. This sailor had served under Admiral Nelson and had gotten a scar from boarding an enemy ship, earning the nickname "Board-her-in-the-smoke."
The Dansker is admired for the wisdom and experience that he has earned in old age (in contrast to Billy's young naïveté). The fact that he served under Admiral Nelson associates him with the glorious military past that the narrator idolizes.
When the Dansker had first seen Billy on the Indomitable, he had "a certain grim internal merriment," perhaps because the naïve Billy was so incongruous on the ship. He was curious as to what would happen to the innocent Billy when he was put in the naval environment without any experience. However, Billy treated the old man with respect, so he took to Billy and liked him. He began calling Billy "Baby Budd" and the nickname became popular among the other sailors on the ship.
Based on Billy's youthful appearance, the Dansker was originally somewhat doubtful of how he would perform on the warship. But, through his respectful behavior, Billy earned the friendship and loyalty of his older shipmate.
Billy told the Dansker about his troubles with minor infractions and asked for advice. The Dansker replied by saying that "Jimmy Legs" (a nickname for Claggart) was "down on" Billy. Billy was confused, because he thought Claggart liked him, but the Dansker insisted that Claggart was "down on" Billy.
In his innocence, Billy is reluctant to believe that one of his comrades aboard the Indomitable would dislike him. Further, Billy cannot understand sly or non-straightforward behavior. Red Whiskers didn't like him openly on the Rights-of-Man. That Billy could understand, and they fought it out. But Claggart operates more clandestinely, and Billy only responds to what he sees, to surface appearances.