Thomas Gradgrind walks home, very stoked about himself.
He thinks about how his five children have been brought up in this no-horses-on-wallpaper system. He also thinks about how his house, Stone Lodge, is boring, square, and has no creative touches anywhere in it. He's proud that he is known throughout Coketown as an "eminently practical" man, father, and friend.
At the edge of town, Gradgrind hears music and sees the tents of Sleary's traveling circus. There are posters advertising the horse riding and clowning of Signor Jupe and his dog Merrylegs. The circus is totally against everything Gradgrind stands for (since it's fun and creative and stuff).
He is horrified to see a couple of kids peering into the ring through a few holes in the fence.
Gradgrind is really psyched to discipline these kids that dare to have an imagination.
Then he discovers that they are…his own two children, Louisa and Tom! (Act shocked, no one saw it coming.)
Louisa tells Gradgrind that she brought Tom to check out the circus, and in response to him yelling at her about it, she tells her father that she is tired "of everything, I think."