The night after visiting Kate, Merton gets a telegram from Aunt Maud asking him over for dinner, since Susan and Milly will be there. Susan Stringham shows up to dinner alone, though. The two other guests are nameless gentlemen whom Merton doesn't recognize.
Kate tells him that after dinner they'll be able to have ten minutes alone together without seeming inappropriate. The dinner conversation revolves around Merton having already known Milly, since this info is now out in the open.
Susan suddenly comes out, though, and tells Merton that he knows absolutely nothing about Milly. It seems pretty abrupt for such pleasant conversation, especially considering that Merton hasn't made any comment about "knowing" (wink wink) Milly.
Merton also reminds Susan that she wasn't around when he was visiting Milly in New York. Aunt Maud chips in to say that Susan also doesn't know what Milly and Merton got up to in New York.
This really flusters Susan, but the tension soon dissolves when Merton says he didn't get much of a chance to meet Milly. They spend the next few minutes dancing around the question of how much of an impression Milly has made on Merton.
They continue to talk about Milly as a sort of object, saying that Merton has "discovered" her, and that the other people take credit for cultivating her and making her into the social success she is.
The chapter draws to a close with a comment about how Susan secretly thinks that not all the Kate Croys in the world can measure up to her beloved Milly.