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It's the morning after the party, and Captain Vye decides to ask why Eustacia was out and about so late. He generally inquires about her activities once a month or so.
Eustacia responds that she was "in search of events" (2.7.2).
She then confesses that she went out with the mummers and gave an Oscar-worthy performance as the Turkish Knight.
Grandpa finds this hilarious but tells her not to do it again because he doesn't want her wearing pants. The horror!
Eustacia goes for a walk and spies Diggory Venn and his ever-present Pig-Pen cloud of red dust. Diggory has remained on Egdon Heath a lot later in the season than he normally does.
Eustacia ponders his situation and feels bad for the loser, since Thomasin likely won't accept his back-up proposal of marriage.
She goes up to chat with him.
Our narrator interrupts with a short nature description paragraph. It's winter, so the trees are losing the last of their leaves.
Eustacia grills Diggory on why he's still hanging around Egdon and he gets embarrassed.
She decides that he's just a pawn to Mrs. Yeobright.
Eustacia then spies a "painfully well-known figure" (2.7.27) – Damon, of course – and lies about being tired. So Diggory offers her a seat in his campsite and she hides there till Damon passes by.
Diggory calls her on her avoidance tactics and Eustacia boldly announces that she hopes Thomasin's marriage to Damon goes off without a hitch.
Diggory is shocked. He reminds her that Damon is planning to meet her that night at Rainbarrow.
Eustacia says she wants to tell Damon to back off but doesn't know how to dump him.
Diggory suggests that she write a letter and he offers to deliver it to Damon that night. So she writes a letter.
Eustacia doesn't understand Diggory's motive here and he confesses that his love for Thomasin is so pure that he'd like to see her happy, even if it's with another man, or something.
Eustacia is confused by this unselfish attitude and thinks it's kind of lame.
Nosey Diggory asks what Eustacia wrote, but she won't tell him.
We wouldn't trust Diggory to deliver that letter unopened, Eustacia.
So that night Diggory sidles up to a waiting Damon and delivers Eustacia's letter to him, with a side order of sarcasm.
Wildeve reads the letter and is definitely not happy.
The letter itself is pretty blunt – Eustacia says that Damon treated her badly and notes that he can't blame her for dumping him. She concludes by saying that she's returning some gifts he gave her via Diggory.
Wildeve is pretty pissed and also hurt. Diggory stands around humming and acts like a smug punk about the whole thing.
The two argue and Wildeve finally stomps off.
Damon can't believe that he's about to lose two women all at once, which is just embarrassing. He decides that he'll try to win Thomasin back and teach Eustacia a lesson in the process. By binding himself in lifelong matrimony to another person.
"Full of his resolve to marry in haste, and wring the heart of a proud girl, Wildeve went his way" (2.7.81).
Diggory meanwhile is very cheerful – he thinks that he has a shot with Thomasin now since she most likely won't take Wildeve back either. And if not, at least she'll be married finally and free from scandal and gossip.
The two men meet up at Thomasin's house and Wildeve brags that he's already won Thomasin back.
Diggory is very disappointed.
Mrs. Yeobright comes out to chat with Diggory and explain the situation. He goes back to his wagon and gets back into his normal, red-stained clothes once more.