Rama, Lakshmana, and Sita travel far away from Ayodhya to keep people from trying to persuade Rama to return home. They meet sages along the way, all of who treat Rama kindly. One sage's wife gifts her clothes and jewelry to Sita. One day, they meet the great eagle Jatayu. He explains to Rama that he was a friend of Dasaratha, cries when hears that Dasaratha died, and swears to end his life. Jayatu promises to stay alive until Rama returns to Ayodhya, though, and promises to protect Rama and Sita while they're in Panchvati, where the asuras live.
As Rama begins his time in exile, these promises from Bharatha and Jatayu work to cement Rama's fate and the fates of his companions: Bharatha now will die if Rama doesn't return, and Jatayu is duty-bound to offer his protection or else suffer the consequences of failing. Though he hasn't been told outright, Rama's divinity leads him to the asuras so he can rid the world of them, as he's destined to do.
As they travel, Rama is enchanted by Sita's loveliness, particularly when she wears the jewelry from the sage's wife. They reach Panchvati and Lakshmana constructs a home. Though Rama is delighted with the house and with Sita, he can't forget that he's come to Panchvati to destroy the asuras that plague the region.
Rama is still definitely human and subject to human pleasures. Though he enjoys the idyllic life he's leading at the moment, his divinity keeps him from forgetting that he does indeed have a greater purpose in being in this area, and it keeps him from shirking his duties to fate.
One night, Rama notices an exceptionally lovely woman in the woods. This makes him nervous, though he's struck by her beauty. She introduces herself as Kamavalli (Soorpanaka), the demon Ravana's sister. Rama is surprised at her human form, but the woman explains that she wants to be different from her evil relatives and became beautiful through prayer. She continues, saying that she's rejecting her brother and his evil ways, and she asks Rama for help. Rama agrees to help her if her request is proper.
Though we'll soon learn that Soorpanaka is lying, she suggests here that it is entirely possible for someone who's born a demon or evil to make themselves better through prayer and devotion—a possibility that plays out more sincerely elsewhere in the story. This introduces the idea that individuals have some degree of control over where they fall on the spectrum of good and evil at any given time.
Soorpanaka refuses to outright state her purpose, but Rama realizes she wishes to marry him. He realizes that though she looks beautiful, she's actually "cheap and shameless." Rama pities her and offers several reasons why they cannot marry, and she counters every one. Rama pokes underhanded fun at Soorpanaka, which Soorpanaka doesn't understand.
Rama, of course, can't marry anyone else because of his and Sita's divine origins. They were made for each other, not for others. Notice, though, that Rama isn't angry with Soorpanaka—instead he pities her. This again shows his goodness and how much he cares for people, regardless of status.
Sita comes out of the cottage, stunning Soorpanaka with her beauty. Soorpanaka asks who Sita is, thinking that Sita and Rama are the perfect man and woman. She decides that Sita must have snuck up on Rama and seduced him, and tells Rama this. The narrator notes that Soorpanaka may as well have been confessing her own intentions (her normal state is enormous and demonic, and Ravana allows her to roam through this forest. She saw Rama earlier, fell in love, and adopted her human form to seduce him). Rama plays along, giving Soorpanaka hope. She yells at Sita, but then Sita runs to her husband.
Soorpanaka unwittingly realizes the truth when she thinks that Rama and Sita are perfect—they literally are. Because Soorpanaka is actually a demon and not trying to be good like she said, she doesn't have the skills to truly convince Rama that she's human, or overpower Rama's goodness. This is an early suggestion that good will always triumph over evil, even in relatively minor conflicts like this one.
Rama tells Soorpanaka to leave before Lakshmana sees her. Soorpanaka tries to convince Rama again to marry her, but he turns and walks with Sita back into the house. Soorpanaka nearly faints and heads back to her lair. She cannot find comfort, and feels tormented by everything that touches her. She hallucinates that she's touching Rama. Finally, she decides that if she can eliminate Sita, Rama will love her.
Soorpanaka's reaction to falling in love is shockingly similar to Sita's, which suggests that overwhelming love is an equalizing female trait, regardless of whether the female is human or demon. Soorpanaka demonstrates her own evil by deciding to eliminate Sita; she doesn't care at all for Sita's emotional wellbeing.
The next morning, Soorpanaka returns to Rama's house and watches him go to the river. She sees Sita leave the house to pick flowers and begins to stalk her. Lakshmana, however, notices her from afar, and when Soorpanaka pounces on Sita, Lakshmana attacks Soorpanaka. When he realizes that Soorpanaka is a woman, Lakshmana chops off her nose, ears, and breasts and leaves her screaming on the ground, calling out to her brothers.
Lakshmana has evidently forgotten the lesson that demonic women can be killed just like men, yet he also shows no mercy in his brutal mutilation of Soorpanaka. This also makes good on Rama's earlier threat that Lakshmana would hurt Soorpanaka if she didn't leave.
Rama sees her when he returns from the river and asks Soorpanaka why she's all bloody. She cries that Rama doesn't recognize her, and Rama realizes that she's the same "damsel" from the night before. Rama asks Lakshmana what happened, and he explains. Rama tells Soorpanaka to leave, but Soorpanaka threatens that Ravana will take revenge on Rama if he doesn't marry her. She offers to help Rama make the rakshasas (lesser demons) his slaves. Rama tells her that he can deal with the demons himself and tells her again to leave.
Though it's unclear if Rama is truly aware that he's the living embodiment of the perfect hero, he does seem to understand that he has a great deal of power over demons. Soorpanaka's threat here acts as a promise, and therefore foreshadows the conflict of the rest of the story, as Ravana is now duty-bound to try to take revenge on Rama for his sister’s sake.
Thinking it will help, Rama explains to Soorpanaka who he is and how he came to be in the forest. He mentions that he destroyed Thataka, which causes Soorpanaka to suggest that she can teach Rama all the tricks of the rakshasas. She then offers to marry Lakshmana, making Lakshmana angry. He asks if he can kill her, and Rama says he can if Soorpanaka doesn't leave. Finally she leaves, but promises to return with Kara.
Here Rama's goodness is almost a fault, as he immediately reveals his plan to destroy the rakshasas and asuras. He doesn't take into account that the demons don't seem to respond to logic in the same way that he does.
Kara is a warrior demon with a vast army who protects Soorpanaka. Soorpanaka explains to Kara what happened, and Kara instructs his commanders to attack Rama. When Rama sees Soorpanaka and the commanders coming, he instructs Lakshmana to protect Sita, and singlehandedly uses his bow to decimate the army. Soorpanaka returns to Kara, who gathers an army of rakshasas to wipe out Rama's house. Rama again defeats the army. Soorpanaka heads for Lanka to tell Ravana what happened.
Through these two scuffles, Rama demonstrates to the reader, as well as to Soorpanaka, that he is indeed the ideal hero and a competent archer at that. Rama's skills with the bow are indicative of his heroism and his strength. Remember too that Rama is also using supernatural weapons (asthras) in addition to his physical bow and arrows, which he obtained because of his goodness.