The Duke had given his servants orders in advance instructing them to treat Don Quixote as a knight errant, so when the company gets to the castle two servants in beautiful livery ceremoniously lift Quixote off his horse and sprinkle him with perfumed water, shouting a formal welcome to the “crème de la crème of knight-errantry.” At this moment Quixote finally believes that he is a real knight errant.
Only a little while ago, Quixote had started to lose faith in the world. Now, reality and imagination are in harmony. The world finally resembles the world of chivalry books, and Quixote believes in his own fantasy. But hasn’t he believed it all along? Perhaps not, or not quite.
Don Quixote is escorted into a beautiful private suite. He finds Sancho and scolds him for his rudeness, warning that his bad behavior might make Quixote look like a “charlatan.” Quixote changes into a fine shirt and is escorted to an extravagant dining room. The two friends and the Duke and Duchess are joined by a sullen-looking priest. Quixote and the Duke politely discuss seating arrangements, and Sancho decides to tell a story. A rich hidalgo from his village invited a poor farmer to dinner, and they both insisted that the other sit at the head of the table until the hidalgo forces the farmer into the seat of honor and says angrily that “wherever I sit will be the head of the table as far as you’re concerned.” Don Quixote is endlessly embarrassed.
But maybe Quixote is not fully taken in by the charade. Perhaps if he had met the Duke and Duchess in the first part of the history, he would have been completely gratified. But he is still shaken from his recent disillusionment about the world. When he scolds Sancho and worries about looking like a charlatan, we see that he considers the whole event as a sort of performance. They must act their parts well. Sancho, too, is aware that their hosts are not entirely well-meaning. His anecdote hints that the Duke and Duchess’s generosity is put-on, and can become condescension at any moment.
The Duchess inquires about the Lady Dulcinea, and Quixote mournfully admits that enchanters have turned her into an ugly peasant girl. Here the priest realizes the man in front of him is the Don Quixote from the famous book, which he despised, and yells at him to go home and give up all his nonsense.
Even in this chivalry idyll, there is an angry priest who abuses and mocks Quixote, and tries to take away his fantasies. Priests are usually villains in the novel.