- It's Christmas night, and the people of the castle are having a good time. The boys have snowball fights, people are ice-skating on the moat, and even the birds get a feast of crumbs.
- All of the villagers are treated to a magnificent feast in the castle.
- We learn that King Pellinore has given up chasing after the Questing Beast, because he's having too much fun staying with Sir Grummore (plus, he gets to sleep in a feather-bed).
- Several people sing songs (one a slightly risqué ditty about King Cole—apparently a longtime tradition).
- Sir Ector gives a Christmas speech (which he gives every year), and then everyone sings "God save King Pendragon."