Two sailors, filling the scuttle-butt (or drinking water container) are talking during the middle watch of the night. One unnamed sailors tells Cabaco, the other, that he thinks he hears coughing belowdecks somewhere, even though no men should be sleeping in that particular part of the boat. But Cabaco tells him to pay no mind to this, since he must be hearing things, and asks him to continue filling up the bucket with water.
Still more foreshadowing, regarding the stowaways, or members of Ahab’s tiger crew. The prospect of stowaways was a real one in the 1800s, as ships were loaded in port for several days, and were large enough to allow people to hide out until the ship had left harbor. It would have been relatively common for sailors at the time to have shipped out on vessels later revealed to have stowaways aboard.