Nicholas and Smike leaves the theater company and return to London. He's no sooner arrived than he hears Sir Mulberry Hawk in a dining hall making objectionable remarks about his sister Kate. An argument ensues and when Hawk tries to leave in his carriage, a accident ensues causing severe injury. Meanwhile, Wackford Squeers and his son Wackford Jr. arrive in London intent on locating Smike. When they find, the poor lad is locked in a pantry. Nicholas has the good fortune of meeting Edwin and Charles Cherryble who not only offer his a well paying job but the use of a cottage at a very reasonable rent.