- Will and Jim sleep fitfully. Rain falls through the night.
- The carousel starts up again and the calliope begins playing.
- Miss Foley hears it. She slips out of the house.
- In the morning at 9:15, Jim comes outside wearing his rain gear. He looks over at Will's door. It opens. Will and his father emerge.
- Charles offers to accompany the boys to the police station, but Will shakes his head.
- The boys start off. Jim says he dreamt last night of a funeral that came down Main Street, ending with a coffin forty feet long that carried the body of the balloon.
- Jim asks if balloons can die. Will tries to tell him what he did last night, but Jim keeps talking excitedly.
- Will finally gets an opportunity to tell his friend, but they are stopped short by the sad plaintive sounds of a little girl under a tree in the rain.
- Jim tells Will not to investigate, but Will proceeds forward.
- The little girl begs for help. She recognizes the boys and begs them not to leave her.
- Will believes her, but Jim claims she is lying. Will promises to help her and tells her to stay put under the tree.
- The two boys leave. Jim is incredulous, but Will is adamant that the girl is Miss Foley. They walk over to her house and ring the bell.
- No one is home.
- The carousel calliope continues to play "Funeral March" backwards.
- The boys speculate about what might have happened to Miss Foley.
- Will is convinced they must help her. As they run out of the house, they hear the thump and blare of music. The carnival is coming into town.
- Will argues that the carnival is posing as a parade in order to search for the two boys, or possibly Miss Foley. He tells his friend they have to get to Miss Foley before the carnival does.
- It is too late. There is no one under the tree.
- Scared now, the boys run into town looking for a good hiding place.