Camelot hosts a lot of tournaments—there's not a whole lot going on leisure-wise in the 6th century—and though the Yankee doesn't much care for them, he attends anyway. He also mentions that he has established a patent office, and has plans to start a school and a newspaper as well. Way to get things done, Hank.
A giant tournament with over five hundred knights begins and the Yankee asks a priest to record the results for him.
While watching the tournament, Sir Dinadan approaches the Yankee and lays into him with his endless array of bad jokes.
The Yankee resorts to the only viable escape from the endless bad jokes—passing out—and awakens just in time to see another knight give Dinadan a blow to the head. He mutters to himself, "I hope to gracious he's killed."
A passing knight, Sir Sagramor, overhears the comment and believes it was intended for him.
Needless to say, wacky mayhem ensues, and Sagramor names a date some years in the future when he and the Yankee will duel over the perceived slight. He's searching for the Holy Grail these days, otherwise it would totally happen sooner.