Back at Prospero's cell, Prospero comes clean to Ferdinand. He says the mean trials he put Ferdinand through were only to test the guy's love for Miranda. Prospero says Miranda is a third of his life, and he wouldn't give her up to a man he hadn't tested. However, now that he's sure Ferdinand is a good guy, he can have Miranda for his wife.
Ferdinand accepts gladly, but not before Prospero warns him that if he "break[s] her virgin-knot" before all the sacred ceremonies of marriage, the heavens will rain down misery on him, and they will be assured an unhappy life.
Ferdinand assures him that, even if he's in the darkest, steamiest place, he'll keep his paws off Miranda so they can have a special wedding night. He adds that the wedding day will be agonizingly long and says that he'll be very anxious to get Miranda back to the honeymoon suite after the ceremony is over, if you know what we mean. This is definitely weird for Ferdinand to be talking about with Miranda's dad.
Satisfied with his pre-wedding chat with Ferdinand, Prospero calls in Ariel, who has more work to do. Prospero wants to show some of his "art" (read: magic) to the young couple. As an engagement gift, Prospero is going to whip up a little "masque" (a lavish courtly performance with lots of music and dancing).
Ariel then pledges to perform, and asks, like a pet, if he is loved. Prospero replies that Ariel is loved dearly.
Soft music begins playing and a series of gods appear before the young couple. Iris, goddess of the rainbow and messenger of Juno (a.k.a. Hera, Zeus/Jupiter's wife), calls upon Ceres, goddess of agriculture, to show herself and help with the entertainment.
Ceres shows up, and asks why she's been summoned. Iris tells her it's to celebrate true love. That's cool, Ceres, says, but she wants to know if Cupid and Venus will be there—she has beef with them, since they plotted the way for Ceres' daughter, Proserpine (or Persephone) to be stolen by Pluto (a.k.a. Hades), the god of the underworld. Iris assures Ceres that Cupid and Venus are both busy, and Juno then shows up to shower blessings on the couple along with Ceres.
Ferdinand and Miranda are amazed, and Prospero says these are spirits he has called up on behalf of the young lovers. Nymphs and land reapers are then summoned, and they perform a beautiful dance.
We interrupt this magical performance for a brain snack: In the winter of 1612-1613, The Tempest (along with thirteen other plays) was performed in honor of the marriage of King James I's daughter Elizabeth to Frederick (the Elector Palatine). Some scholars think that Prospero's "masque" was added by Shakespeare just for this performance, but other critics say there's no evidence that it wasn't an original part of the play.
Suddenly Prospero jumps with surprise, and all the spirits vanish. Prospero has realized that, oopsy-daisy, he's forgotten Caliban's plot against his life! He'd better stop messing around and get to halting that scheme.
Responding to Ferdinand's surprise at his sudden change in mood, Prospero gives a beautiful speech that these wonders (his magic), much like life, will melt into thin air eventually. He says, "We are such stuff as dreams are made on; and our little life is rounded with a sleep."
Prospero sends Ferdinand and Miranda into his cell while he plans for his next move.
Prospero has a chat with Ariel, who says that Stefano, Trinculo, and Caliban were hot with rage (and completely drunk) when he last saw them. Ariel led them to just outside Prospero's cell with his music, and left them wading in a filthy, scummy pool.
Prospero instructs Ariel to set his nice linens and fineries outside the cell as bait for the thieves and would-be murderers.
He curses Caliban for being a devil. Prospero promises to plague all of the men plotting against his life. You do not want to get on this guy's bad list.
Caliban, Trinculo, and Stefano have escaped from the nasty pool, and while they all smell of "horse piss," the greatest tragedy was losing their wine bottle.
Caliban assures them that their prize will be worth it, and eggs them on to Prospero's cell.
Just as Stefano begins to have thoughts of bloody murder, Trinculo points out what nice things there are for a king's wardrobe hanging outside, and the two get distracted. Caliban panics at their lack of focus; he is sure Prospero will wake up, find them all out, and torture them.
Sure enough, Ariel and Prospero conjure up spirit-dogs and hounds that chase the three off. Prospero promises they'll have plenty of cramps, pinches, and convulsions as they run away, hunted by the spirits.