All of Barcelona is burning with an expectation of seeing bullfights and famed toreadors. While many are peacocking in the square, none can match the innkeeper’s daughter Kitri’s beauty, perhaps except for a barber named Basilio. Like a cat-and-mouse game, they seduce and tease each other. It’s evident to anybody with eyes that they are meant to be together. However, Kitri’s father, Lorenzo, vehemently disapproves of their relationship. He wants Kitri to marry Gamache, a foppish nobleman with a deep pocket. Meanwhile, Don Quixote and Sancho Panza reach Barcelona. Spellbound by Kitri’s beauty, Don Quixote confuses her for Dulcinea. But soon, he sees a vision of Dulcinea and realizes that Kitri is not her. Nevertheless, Don Quixote believes that Kitri, who looks like she leaped out of the pages of chivalric romance, deserves a happy ending. Therefore, Don Quixote decides to shield Kitri from any adversity. Taking advantage of the merrymaking in the square, Kitri and Basilio elope.

Kitri and Basilio find themselves in a forest. Don Quixote follows the lovers and makes a vow that he will protect their love. A traveling troupe of players reaches the forest and is delighted to discover a potential audience. Don Quixote, Sancho Panza, and the lovers end up seeing their play. It’s a story after Don Quixote’s heart—a tale of a beautiful damsel in distress, a brave prince, and a frightening monster. But this fiend looks precisely like the creature that kidnapped Dulcinea. In a fury, Don Quixote charges with his spear. But alas, it was just a windmill. Having smashed into a windmill, Don Quixote faints.

In Don Quixote’s dreams, the forest is terrorized by flames and vicious creatures. Once Don Quixote defeats the creatures, the firestorm vanishes, and Cupid appears. Cupid shoots an arrow at Don Quixote’s heart, transforming him from an old hidalgo to a dashing knight. Finally, Don Quixote reunites with Dulcinea in the enchanted forest, and they rejoice. For Don Quixote, this is paradise, and Dulcinea is the eternal sovereign of his heart. But Dulcinea instructs that time has come for Don Quixote to return to his chivalric quests. Then everything fades away.

Don Quixote opens his eyes to see that Sancho Panza, Kitri, and Basilio are by his side. While Don Quixote wallows in sorrow from being parted from Dulcinea yet again, Gamache and Lorenzo come to abduct Kitri. Seeing Basilio in the anguish of losing his lover, Don Quixote instructs him on a scheme to persevere in this plight.

Wedding preparation is in full swing for Kitri and Gamache. But never has the city seen such an unwilling bride. Basilio barges in and shares his plan with Kitri in a whisper. With a dagger in his hand, Basilio declares that he would choose death over unrequited love. Basilio then pretends to stab himself. Rushing to her dying lover, Kitri implores her father to fulfill Basilio’s last wish. Don Quixote silences Gamache and Lorenzo’s objection and blesses the lovers. With the benediction complete, Basilio makes a miraculous recovery. Lorenzo concedes that Kitri’s future is in her own hands and that her happiness lies in staying with Basilio. The entire town celebrates the lovers’ wedding.

And so, the valorous knight Don Quixote righted the wrong. He made the young lovers’ dream a reality. For new dreams and deeds of chivalry, Don Quixote sets out once more on his adventure.