Sam helps the group smuggle the horse onto the railroad bound for the racetracks, and everyone returns to the brothel to sleep.
Lucius holes up again with Otis, who tells him about his peephole business. He charges boys of the neighborhood to watch his aunt work at the brothel.
It's here that Lucius learns what it is exactly that Miss Corrie does for a living, and he becomes enraged. So much in fact, that he fights with Otis, who then pulls out a knife.
Boon and Miss Corrie hear the fighting next door and come out to break up the fight.
Miss Corrie scolds Otis and forces him to leave the next day on a train. She also notices that Lucius's hand is bleeding from the knife, and she takes him into her room to care for him.
Miss Corrie confesses that no man, much less a boy, has ever stood up for her. She vows to change her ways, give up prostitution, and live an honest life. She tells all this to Boon, who becomes upset that she has to choose right now to suddenly become reformed.