Book 1, Part 11: Don Quixote reaffirms to himself and to Sancho the fact that the inn was enchanted. This seems to be his explanation for everything. Sancho, always the realist, tells his master that those who flung him into the air were not otherworldly, as the knight had suggested, but just average inns people. Furthermore, the squire implores Quixote to let him return to their village and take up normal living again. The devoted knight-errant, however, rebuts his argument, saying, "all this must be suffered by those who profess the stern order of chivalry." Quixote also affirms the honor of the noble warrior winning victory in the field. He plans to attain a special sword which will ward off the enchanters.
Moving on, they see two dust clouds, coming towards each other from opposite directions, which the Don takes to be mighty armies preparing for battle, and he carefully constructs an elaborate story around the scene based on his romantic reading. One side, he says, is led by a valiant Christian warrior, while the other is made up of pagan Muslims. Quixote, a good Catholic, of course chooses to aid the Christian side. In reality, though even Sancho is fooled this time, the clouds are actually two large groups of sheep and their herders. When the noble knight-errant begins interfering with the movement of the sheep, however, the shepherds begin to hurl stones at him, knocking out several of his teeth. After the battle, Sancho finds his master terribly wounded, and of course convinced that enchanters again changed the armies into flocks of sheep.
Next, the Don throws up, but reasons to Sancho that because they have had so much bad luck of late, good fortune must surely be on the way. He tells his loyal squire, sounding now more like a churchman than a knight: ".God, who provides for all, will not desert us; especially being engaged, as we are, in His service." Later, Quixote alludes to the value of a liberal arts education, saying that knights-errant should "know somewhat of all things."
Book 1, Part 12: On the road again, Sancho and his master see some strange lights which look like moving stars, but are actually white robed men on mules, carrying torches as part of a funeral ceremony. Quixote, as always, sees a challenge coming and prepares for another battle. Seeing the crazed knight approaching them, all of them flee, save a wounded man who remains behind after the Don breaks his leg. Declaring victory, the knight-errant calls himself the Knight of the Rueful Figure, believing this is how history will identify him.
Being both hungry and especially thirsty, Quixote and his squire begin traveling again, stopping when they hear strange sounds in the distance. Next, responding to the noise, the Don tells Sancho that he is going on a journey, and that if he doesn't return in three days, he has his permission to return to his village and resume his normal life again. Since Sancho fears the dark, however, he ties Rozinante's leg to his own ass in order to prevent Quixote from leaving. In the morning, though, all this is irrelevant because they realize the sound is simply some mechanized hammers of some sort. When Sancho ridicules his master for such stupidity, the knight-errant becomes genuinely angered and begins to beat him with his lance.