David reflects on his earliest childhood memories, noting his belief that children are very skilled observers of the world around them and attributing his vivid memory to having retained this skill. David accordingly describes his earliest impressions of Clara, Peggotty, and the home where he grew up. The house is modest but comfortable, and David describes the garden as particularly lovely: "a very preserve of butterflies […] with a high fence, and a gate and padlock; where the fruit clusters on the trees, riper and richer than fruit has ever been since." Ultimately, the three of them functioned as a kind of family: despite being a servant, Peggotty would sit with them in the evenings, and he and his mother "submitted [them]selves in most things to her direction."
David's remarks about children's ability to absorb and remember their surroundings are a way of justifying the otherwise unbelievable amount of information David retains and includes in his memoir. However, David's theory that children often lose the capacity to take in the world around them as they age is interesting, especially in the context of a coming-of-age novel; to some extent, the ability to be a passive observer of the world may conflict with the pressure for adults (and men in particular) to be active participants in the world. The suggestion that memory itself is a skill that people often lose as they grow older is in keeping with the novel's frequent nostalgia. In this passage, for instance, nostalgia also colors David's description of his childhood home. Although the absence of a father makes his home is incomplete by the standards of the time, David nevertheless depicts it as a kind of lost paradise.
One particular memory stands out to David. While reading aloud to Peggotty one day, David pauses and asks whether Peggotty ever married, describing her as "very handsome woman." He also wonders whether it's acceptable to marry more than one person—either at once or in succession. Peggotty, somewhat flustered, says it's a "matter of opinion" whether a widower or widower can remarry, and also denies having any intention of ever marrying herself.
Although David will go on to lead a conventional married life with a conventionally beautiful woman, his remarks to Peggotty here open up the possibility of other domestic arrangements with other kinds of women. Peggotty is stout and ruddy, and certainly does not conform to Victorian standards of beauty, so it is striking that David simply takes it for granted that she's attractive. Meanwhile, his innocent question about bigamy foreshadows the difficulties he will have with committing to one woman for life.
David continues reading and is eventually interrupted by the arrival of Clara, who has been visiting a neighbor. She is accompanied by a handsome man whom David will eventually learn is Mr. Murdstone. Murdstone is friendly with David and attempts to pat him on the head, but David takes an instant dislike to the man, in part because he is "jealous that his hand should touch [David's] mother's in touching [David]." Clara and Murdstone say their goodbyes, and she, Peggotty, and David go inside the house. As Clara and Peggotty discuss the "pleasant" evening Clara has had, David falls asleep.
Although Freud hadn't even been born when Dickens wrote David Copperfield, David's relationship with his mother definitely has Oedipal undercurrents. While it quickly becomes clear that David's suspicion of Mr. Murdstone is justified, his initial reaction is explicitly tied to jealousy—and even physical jealousy, as his remark about Clara and Murdstone's hands demonstrates. The closeness of David and Clara's relationship becomes a problem as David grows older and attempts to establish his own family, because he chooses a woman who he isn't especially compatible with, but who does greatly resemble his mother.
David wakes up later to the sound of Peggotty and Clara arguing over whether it is appropriate (and kind to David) for Clara to spend time with Mr. Murdstone. Clara appeals to David about whether she is a "nasty, cruel, selfish, bad mama," and all three of them go to bed crying and upset.
Although there's truth to Peggotty's words, her views on how Clara should behave as a young widow are also somewhat restrictive: it's unclear whether she would approve of Clara remarrying at all, but she certainly doesn't want her to marry a man her late husband wouldn't have approved of. In effect, then, Peggotty believes Clara should devote the rest of her life to her husband's memory and her role as a mother. This is a period-appropriate view, but it also denies Clara any opportunity to act on her own desires. Of course, the fact that Clara's attempt to do so ends disastrously could be read as a statement on the dangers of "selfish" female desire.
Mr. Murdstone and Clara continue to visit with one another, and the atmosphere at the Rookery becomes subtly tense, with Peggotty spending less and less time with her employers. For his part, David continues to view Murdstone with suspicion.
Mr. Murdstone’s arrival shatters the domestic bliss of David's early childhood. The fact that Clara allows her home to unravel in order to pursue her own ends is another mark against her suitability as a wife and mother from a Victorian perspective.
One morning, Mr. Murdstone takes David with him while he visits Lowestoft, where he introduces David to two of his friends, Quinion and Passnidge—one of whom asks whether David is "bewitching Mrs. Copperfield's incumbrance." Under the guise of talking about "Brooks of Sheffield," Murdstone's friends question how David feels about "the projected business"—that is, Murdstone's marriage to Clara. Murdstone says he is "not generally favourable." The three men then drink and dine together before leaving David to talk privately in another room. David thinks about the men's interactions and concludes that Murdstone is "more clever and cold" than the other two men, who joke with one another but appear somewhat in awe of Murdstone.
Ominously, Murdstone seems to take pleasure in making a joke of David's ignorance in front of his friends. He also evidently wishes he could marry Clara without taking on responsibility for David, based on the fact that his friends refer to David as an "incumbrance," or a burden. None of this bodes well for his future role as Clara's husband and David's stepfather.
When David and Mr. Murdstone return, Clara questions her son about the day he spent, and is visibly pleased to hear what the men had said about her. She cautions David not to say anything about it to Peggotty, however. Back in the present, David remarks that his mother's image—her "innocent and girlish beauty"—is still just as vivid to him as it was that night.
Even setting aside her own feelings for Mr. Murdstone, it's not hard to guess why Clara takes so much pleasure in being called pretty: beauty was expected of women at the time. Clara's "mistake" lies in being too aware of her own beauty; it's all too easy for Murdstone to play on her vanity to manipulate her into marriage. Still, she's largely a sympathetic character, and David's memories of her remain untarnished.
Sometime after David's outing with Mr. Murdstone, Peggotty asks whether David would like to come with her to visit her brother, Mr. Peggotty, in Yarmouth. David is intrigued by her descriptions of the sea and her promise that he can play with her nephew, Ham, but worries about his mother. He asks whether Clara will let him go, and then whether she won't be lonely without his and Peggotty's company. Peggotty conceals her discomfort with difficulty before saying that Clara will be staying with a neighbor named Mrs. Grayper. David accordingly agrees, and looks forward to the trip.
David hasn't quite grasped the nature of his mother's relationship with Mr. Murdstone—specifically, the fact that David himself is being replaced as the "man of the house." Peggotty, on the other hand, clearly knows that Clara is going to be remarried, and senses that it would be better if David were out of the house when the wedding takes place. In this protectiveness, she increasingly acts as a mother figure for David.
In the present, David remarks that it "touches [him] nearly now, although [he] tell[s] it lightly, to recollect how eager [he] was to leave [his] happy home." Nevertheless, he says it is a comfort to remember how Clara cried and hugged him when he left, though he also noticed, as the cart was pulling away from his house, that Mr. Murdstone had arrived and seemed to be scolding Clara for "being so moved."
Although he doesn't know it at the time, David is effectively leaving his childhood home for good when he goes with Peggotty to Yarmouth. By the time he returns, his mother will have remarried, and his home will no longer feel like home. Nevertheless, David is able to indulge in one final recollection of the old relationship he had with his mother; in some ways, writing his memoir allows David to re-experience a past that is otherwise closed off to him.