Everyone cries in joy except Sancho, who suddenly realizes that Dorotea is not really a princess and can’t give him any estates, and that the giant is really Don Fernando. Don Quixote finally wakes up. Sancho informs him that the giant’s blood has turned into wine, and that the princess has become a peasant girl. Don Quixote tells him he must be mad to say such things, or that enchanters must be responsible for these transformations, but Sancho says that these transformations are as real as the blankets that bruised him.
Don Quixote’s madness converts wine to blood, like Christian faith does on certain occasions – particularly during communion, when bread and wine are considered to be the body and blood of Christ. Quixote embodies certain aspects of Christian faith and morality, applied to a comical, secular world.
Meanwhile, the priest tells Don Fernando and his attendants the story of their adventures, and Don Fernando and Dorotea agree to help complete the project of returning Quixote to his village. Don Quixote comes down and asks Dorotea whether she has been transformed from a princess from an ordinary person, but she denies any such transformation, and begs him to leave for her kingdom tomorrow.
In order to cure Quixote of his delusions, everyone around him takes great pains to sustain those same delusions (at least for some time). The paths of sanity seem much more devious and tortuous, in this book, that Quixote’s steadfast path. The people around him treat him with a slightly paradoxical mixture of contempt and affection, like a child, and their attempts to cure him bear the marks of that paradox.
Just then some more travellers arrive: a Christian man dressed in Moorish clothing and a veiled Moorish woman. Dorotea and Luscinda invite her to stay in their room in the attic, since there is no space anywhere else. The man accepts on her behalf, adding that she cannot speak Spanish. He explains that she is Moorish in origin but Christian at heart. When she removes her veil, she is incredibly beautiful – as beautiful as Luscinda and Dorotea. The man tells them her name is Lela Zoraida, but she cries out in broken Spanish that her name is now Lela María.
The small, dilapidated inn brings together two unlikely casts of characters. There are the divinely beautiful women and romantic noblemen, and then there is the deformed-looking Maritornes, who is most likely a prostitute, and Quixote and Sancho, with their emetics and missing teeth. Cervantes uses more humor and (sometimes squeamish) detail to describe the lower-class characters, so that they seem more human and more relatable – generally considered a quality of realistic literature.
Over dinner, Quixote exclaims with satisfaction that knight-errantry must be a marvelous thing if it can bring together such a diverse and interesting group of people. He goes on to compare the pursuits of arms and letters: the goal of letters is to interpret the law, but the goal of arms is to enforce the law and bring peace. He also compares the sacrifices required: the student suffers from poverty, but the knight suffers all sorts of privation and physical pain. Everyone at the table is impressed by his intelligence and good sense.
Until he was almost fifty, Quixote lived a contemplative life – he lived through reading and imagining. His decision to go into world is surprising, both because he is a scrawny, weak, and almost-elderly man, and because it requires him to shift drastically from one mode to another. The change can be construed as a movement from idealism to realism.