Nancy, back at Sikes' apartment, worries that she must attempt to protect Oliver while hiding her exertions from both Sikes and Fagin. She does not know how much longer she can do this, and despite her belief that both men are "vile," she still feels a certain loyalty to them, and does not want simply to give them up to the authorities.
Nancy is being torn apart by her loyalties, as are many "informants" placed in Nancy's, or similar, positions. But Nancy is steadfast in her unwillingness to send Fagin and Sikes to jail—she alone among all the criminals seems to feel loyalty and love for them, even though she knows of their essentially evil or corrupt natures.
Fagin comes over that night, a Sunday, to join Nancy and Sikes. Nancy is eager to meet Rose on the London Bridge, and asks Sikes if she can go out (although of course not saying she is to meet Rose); Sikes says no, and when Nancy protests, Sikes yells at her, angrily, and says she will go nowhere. Nancy gets even more upset and begins to weep, but Sikes insists she will not leave the apartment. As Fagin is leaving, however, he pulls Nancy aside, out of Sikes' hearing, and tells Nancy that if she ever needs help against Sikes, he is happy to provide it. Nancy does not understand what Fagin's motive is in helping her, but says "thank you" to Fagin regardless. Fagin leaves.
Fagin, on the other hand, is all-too-happy to turn on his "friend" Sikes, if it means that Fagin stands to gain from the arrangement. Nancy does not seem interested in Fagin's proposal, perhaps because she understands that Fagin is not to be trusted. Indeed, although Sikes is physically dangerous and imposing, Nancy appears, at least in these scenes, able to control him; far more terrifying is the untrammeled cunning of Fagin.
Fagin believes, as he is walking home, that Nancy was eager to see a new lover, and that Nancy knows that, if she were to leave Sikes for another man, Sikes would become murderous with rage. Fagin wonders whether he can convince Nancy to poison Sikes—Fagin himself has grown tired of Sikes' raging, and feels he can gain a larger share from the crimes they commit if Sikes is no longer living.
Fagin's assumption, funnily enough, dovetails with the standard assumption of any kind of romantic tragedy—that one party is seeing another person, and that the relationship is falling apart. Little does Fagin know, however, that Nancy has no lover, only a friend, in Rose.
To this end, Fagin vows to send someone along to follow Nancy the next time she goes out to meet the person Fagin believes to be a lover; Fagin can then use this information to blackmail Nancy into killing Sikes. Happy with this plan, Fagin walks briskly back to his apartment building, happy at his own cunning.
Fagin has figured out a gambit which will not result in very much gain for him, but will wind up killing Nancy, and forcing Sikes to flee for his life, to the countryside, and to another flophouse in London.