"The author studies to learn the language, the Houyhnhnm, his master, assists in teaching him. The language described. Several Houyhnhnms of quality come out of curiosity to see the author. He gives his master a short account of his voyage."
Gulliver spends most of his early days in Houyhnhnm Land learning the language with the help of the sorrel nag, the reddish servant to the Master Horse.
Houyhnhnm language sounds a lot like German, but is more "graceful" (4.3.2).
The Master Horse is really interested in Gulliver because he is clearly a Yahoo, but he is so clean and teachable.
The Master Horse asks where Gulliver can possibly come from, to be so smart, but he also refuses to believe that Yahoos could ever build a boat or that there are countries across the sea.
Gulliver discovers that, in their language, "Houyhnhnm" means both horse and "perfection of nature" (4.3.5).
Many Houynhnhnms come to see Gulliver, staring in wonder at a Yahoo who seems to possess reason.
As we've said before, they don't really get clothes, but one night, as Gulliver is getting ready for bed, he accidentally exposes himself to the sorrel nag of the Master Horse. The servant thinks that Gulliver changes skins as he sleeps.
Gulliver has been trying to cover up the fact that underneath his clothes, he really is like the other Yahoos, but now his secret's out.
So Gulliver explains clothes to the Master Horse.
Even without his clothes, the Master Horse is impressed by how different Gulliver is from the other Yahoos, because his skin is so pale, soft, and relatively hairless.
Gulliver asks the Master Horse to stop calling him a Yahoo and to keep the secret of his clothes. The Master Horse agrees.
The Master Horse tells Gulliver to learn the Houyhnhnm language ASAP so that he can ask Gulliver more questions.
Gulliver is finally able to tell the Master Horse that he arrived at his island in a ship made by men and sailed by men, that he was set ashore thanks to an argument between men.
The Master Horse asks how the Houyhnhnms of Gulliver's country allowed a ship to be sailed by brutes.
Gulliver makes the Master Horse promise not to get mad, and then he explains that, in his country, the Houyhnhnms are the brutes and the men are the reasonable beings.