In the fall, Tony sets off for school with Andrew. He is about to begin third grade, where his teacher will be Miss Violet. His friends tease him about Ultima, but he shows he is willing to fight, and after that they leave him alone. Just before Christmas vacation, the children prepare to perform a nativity play. But the night before the performance there is a blizzard. The following day many of the kids, including all the girls, stay at home, but Tony and all his boisterous friends are there. So the play goes ahead. Much to his embarrassment, Horse has to play the Virgin Mary. Tony plays Joseph. The performance, in front of the entire school, is a complete disaster because the boys in the performance misbehave and do not keep to their assigned roles. Even Miss Violet has to laugh.
In the afternoon, Tony walks home in a snowstorm. As he passes the saloon, Tenorio and Narciso tumble out. They are fighting. Tony watches the savage fight in horror. The bartender and two other men have to separate the two men. Tenorio repeats that he is going to kill Ultima, and that he will also kill Narciso if he is in the way. Narciso runs off to warn Andrew. He goes to Rosie's house, where the loose women live. Tony wonders why he goes there, and then gets the shock of his life when he sees Andrew in the house with his arm around a young girl who is dressed only in a loose robe. Narciso warns Andrew of the danger from Tenorio, but Andrew does not take him seriously.
Narciso decides to go directly to Ultima to warn her. Antonio follows him. Tenorio ambushes Narciso and shoots him. The two men fight, and Tenorio shoots Narciso a second time. He then aims the gun at Tony and pulls the trigger, but the gun does not fire. The dying Narciso asks Tony to pray for him, and then to accept his confession. After Narciso's death, Tony runs home and tells his story. His family puts him to bed and he becomes ill from his exposure to the bad weather. During the night he has nightmares about Andrew and the girl he saw him with at Rosie's. In the dream, they both go to Hell. Tony asks God to forgive them and to forgive Narciso. God replies that he will only do so if Tony asks him to forgive Tenorio as well. Tony thinks this is not fair and wants Tenorio punished. Later in the dream, Tony's three brothers appear as tortured spirits and beg him to help them; then the three Trementina sisters wreak their vengeance on Tony, and the wicked people kill his family and Ultima. But after the evil people fish for carp and eat what they catch, the waters rise up and destroy everything, and the golden carp rules.
After the serious matters presented in the previous two chapters, the first part of this chapter, which describes the farcical performance of the nativity play, comes as welcome comic relief. But the serious action and the tension soon return. Tony's discovery of his brother Andrew at the brothel marks another stage in his loss of innocence. And in the aftermath of the murder of Narciso, Tony continues to struggle with problems of religion as he tries to understand the nature of forgiveness and justice. His vivid dream shows that he is deeply troubled by the recent events in all aspects of his life.