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Hans tells the Meyricks and Mirah that Grandcourt drowned, but that Gwendolen is OK and Daniel is at her hotel. He says that Gwendolen is now free to marry whomever she wants.
This all rubs Mirah the wrong way, and she tells Hans so.
Then Mirah and Mab sing at the piano.
Hans realizes that Mirah is mad at him. He's worried that she's in love with Daniel. Then again, Hans remembers that Daniel said that Mirah would only marry a Jewish man, so he figures nothing can happen between Mirah and Daniel. If he only knew!
Hans walks Mirah home. She asks if he wants to come in and see Mordecai. He takes this as a sign that she forgives him.
They find Mordecai looking pretty happy. He says that Daniel wrote to him that he's going to be back soon.
Mirah feels like she has to put on an act to hide her unhappiness. She's convinced that Daniel and Gwendolen are going to get together. As far as Mirah is concerned, Gwendolen belongs to a world that she's not part of.
Mirah realizes that she's deeply in love with Daniel.