Cassio, eager to please, has sent some musicians to play, badly, in hopes of winning back Othello's good favor. Othello's clown comes out and asks the players why their instruments sound so nasal.
Next, the Clown insults the musicians by comparing the noise from their instruments to...well, farts. Get it? Wind instruments, breaking wind?
Then he tells them that Othello likes their music so much he wants them to stop making noise with it. Of course, if they have any music that can't be heard (ahem, silence), they're welcome to play it. The musicians say they don't have any music like that, so he sends them away.
Cassio asks him if Emilia is up yet. Just then, Iago enters and is shocked to see Cassio hasn't yet gone to bed. (Cassio is eager to make his case to Othello...by way of Desdemona, by way of Emilia.)
Cassio says he's already sent for Emilia, and Iago promises to send her to Cassio post-haste, so she can hear his plea and make it to Desdemona. In the meantime, Iago promises to lure Othello away from Desdemona, so Cassio can speak with her freely. Iago exits to do more evil master-planning.
After Cassio praises Iago for his kindness and honesty, Emilia enters and reports that Desdemona is already pleading to Othello on Cassio's behalf. Othello worries that Montano, Cassio's victim, is kind of a big deal in Cyprus, though Othello has decided that his liking for Cassio should be enough to overcome the fact that Cassio has wronged the wrong guy. (There are guys you hit, and there are guys you don't hit. Montano is a guy you don't hit, and Othello is the guy who tells you that.)
Cassio asks Emilia if perhaps he might speak to Desdemona alone. Emilia goes to see if she can arrange such a meeting.