Don Quixote: Novel Summary: Book 2, Part 3-Book 2, Part 4

 Book 2, Part 3: As in the previous book, we find that Sancho and his master argue over Dulcinea.  Although they have entered the town, Quixote is miffed that they seem unable to find her “palace.” Sancho sees three peasant girls and tries to persuade the Don that his Dulcinea is one of them.  Though he initially disbelieves, the knight-errant eventually falls for Sanchos lie, attributing her dismal appearance to the work of enchanters.  Quixote asserts, after evaluating his miserable situation, “Truly was I born to be an example of misfortune, and a target at which the arrows of adversity are aimed.”
Later on the road, they encounter a few actors, one of whom spooks Rozinante.  Don Quixote beckons to them that he wants revenge, but Sancho persuades his bloodthirsty master to refrain this time from violence.
Book 2, Part 4: In this section Cervantes reveals his protagonists love of the theatre, as Quixote explains how plays serve as a mirror of life.  Here, Cervantes borrows from Shakespeare.
Also in this section, the reader begins to sense a change in Sancho-even Don Quixote himself seems to notice a difference.  Because of his increased use of proverbs in his speech, he appears more wise, or perhaps foolish. 
Eventually they encounter the Knight of the Wood/Mirrors and his squire.  Both knights-errant speak alone for a time while their squires similarly converse separately.  Sancho and his fellow squire seem to have much in common and instantly get along, while the knights have a less pleasant conversation.  The Knight of the Wood asserts to the Don, for example, that he has conquered a certain knight-errant called Don Quixote.  Quixote, of course, rejects this claim, attributing the knights error to enchantment.  So the two agree to a duel, the loser of which must submit to anything the victor decrees.  Similarly, the other squire tries to persuade Sancho to fight him while their masters battle one another, but Sancho declines.
After Quixote miraculously wins the duel, however, he realizes that Knight of the Mirrors and his squire are not who they claim to be at all, but actually a couple of common acquaintances of Sancho and his master-Samson Carrasco and Tom Cecial.  Samson, defeated and humiliated by the Don-the crazy man he hoped to beat and persuade to return to his village-swears revenge on Quixote.