- Pilon and Pablo live happily, gossiping about the other people in Tortilla Flat and wandering around in the gulch behind their house.
- Danny shows up and tells Pilon and Pablo that he is hooking up with his neighbor, Mrs. Morales (the one with the chickens). He wants to buy her a present, so he asks Pilon and Pablo to pay a couple dollars of their rent.
- Pilon and Pablo get mad and try to think where they could get the money. They see Jesus Maria Corcoran lying in a ditch, dead drunk. He shares his wine with them, and they try to find out how he got the money to pay for the wine.
- Jesus Maria says that he stole a rowboat and sold it for seven dollars. Unfortunately, he bought wine and some silk undies for a girl named Arabella Gross, who left him after a while for some soldiers.
- Jesus Maria realizes that he does have $3.10 left, and he wants to use it to buy Arabella a bra. Pablo and Pilon talk Jesus Maria into coming home with them so that he won't catch a cold sleeping in the ditch. They get him drunk and ask him if he wants to move in and pay rent. They'll take the three dollars as a deposit.
- They finally settle for two dollars and go to take it to Danny... but then they remember that he's going to use it to buy something (probably candy) for Mrs. Morales. They decide that if he does that, the candy will rot his teeth; they think it would be safer for Danny if they bought wine instead. Okay, guys.
- Pilon and Pablo send Jesus Maria to get some food, and they go for the wine.