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The party arrives in Hagsgate, surprised to find a prosperous town with well-maintained houses and content residents. When Schmendrick crosses the hedge into town, several townsmen accost him with swords. Initially, Schmendrick says he’s a magician in need of food and rest. One of the men notes that magicians are supposed to have beards and that anyone can say he’s a magician these days. Still, the men welcome Schmendrick and Molly, not paying much mind to the unicorn. One of the men introduces himself as Drinn. He leads Schmendrick and Molly to an inn, saying he can provide them with food but may need Schmendrick’s help in return.
By the time they reach the inn, many of the townspeople have followed the group with curious eyes and joined them at long tables in the dining hall. Drinn gives Molly and Schmendrick wine, which Schmendrick indulges in. Molly notices that everyone in the town is as old as Drinn, if not older, without any younger adults or children present.
Drinn tells the tale of Hagsgate. The town was cursed by the same witch who built and cursed Haggard’s castle. The witch asked the town for payment when Haggard refused to pay her, but the town also refused, so she included them in her curse. The curse says that when Haggard’s castle falls into the sea the town will share in the ruin. However, as long as Haggard’s castle stands the town will prosper.
Molly scolds the town for not helping the witch, but Drinn explains that it was 50 years ago, and their parents and grandparents are to blame. Schmendrick tells the town they shouldn’t worry, but Drinn explains that the one who is foretold to bring the destruction of the castle will come from within Hagsgate. For that reason, the town has ceased having children.
Drinn says that one snowy night 21 years ago, he found a baby out in the cold. Despite the snow, the baby did not cry, for it was being kept warm by a pile of purring cats. Drinn knew right away that this baby was the prophetic one and chased the cats away. He then returned home, leaving the baby to die in the snow. Molly is appalled, saying now the town really deserves demise. Drinn says that the next day, the baby was gone. However, shortly after, King Haggard rode through town ordering a celebration, for he finally had a son after 30 years. Haggard has no wife and no family, so the town believes Haggard’s son, now known as Prince Lír, is the baby from the snow. Schmendrick wonders how Haggard could have found the baby. Drinn explains that Haggard visits Hagsgate from time to time after dark, scavenging for worn out junk, garbage, food, and anything he can find.
Molly says she hopes Prince Lír topples the tower and brings the fall of Hagsgate. Schmendrick interrupts her rant to ask what Drinn needs from him. Drinn explains that a magician might know about potions and herbs, and a magician might be able to befriend Lír. Drinn trails off, but his request is clear: he wants Schmendrick to poison Prince Lír. Schmendrick haggles payment for a while, and they settle on 70 gold pieces, half up front and half when the job is done. Drunk and having collected his gold, Schmendrick and Molly set back out on the road despite being offered lodging for the night. The unicorn rejoins them. Schmendrick muses that it was foolish of them to think that all magicians would be comfortable with death magic, adding that he might have been more useful in trying to lift the curse.
Molly is glad for Schmendrick’s deception, still upset about the child being left in the snow. However, Schmendrick muses that they’re living a fairy tale, and the boy’s fate as a prince is good. Schmendrick and Molly are tired, but they did not trust Drinn enough to stay the night.
As they walk along, groggy, they realize they’re being followed by three men from Hagsgate, who believe Schmendrick scammed them. Schmendrick, Molly, and the unicorn hide, but the men find the group by calling to Drinn’s gold, which is enchanted to call back. As an altercation begins, Haggard’s castle in the distance seems to catch fire. Soon, the group realizes that the Red Bull is emerging. The men from Hagsgate flee in fear as the Red Bull approaches the party.
The Red Bull descends upon the group quickly. The unicorn takes off running, abandoning Molly and Schmendrick behind her. The Red Bull doesn’t see Molly and Schmendrick. He pursues the unicorn with powerful hooves and a huge, hulking body that seems to smolder. The unicorn is more afraid of the Red Bull than anything. At first, she gracefully dodges the trees and roots as she runs, but her grace declines as she continues to run. She makes it out to a field where she can run more easily. The Red Bull gains on her and corrals her, leaping in front of her to block her path and forcing her to turn around. The unicorn runs back the way she came.
Schmendrick and Molly follow the bull’s path through the trees, noting how much destruction his hooves caused. As they emerge, they see the unicorn and the bull, still in chase. Molly fears for the unicorn. Every time the unicorn tries to change direction, the bull blocks her path. Schmendrick realizes the bull is driving the unicorn toward Haggard’s castle. Molly begs Schmendrick to do something, but he explains his tricks would do nothing against the Red Bull. Schmendrick recalls his mentor, Nikos, who transformed a unicorn to protect it from hunters but laments that he is not powerful enough for that. Molly notices the unicorn is tired. The unicorn has stopped running and now slowly follows the path to the castle, with the Red Bull behind her.
Molly argues that Schmendrick does have magic, reminding him of how he summoned Robin Hood from thin air. She urges him to seek the magic. Schmendrick realizes he cannot make the situation worse and dares to try to use his magic to help. He cries out for the unicorn to run again, which she does. Schmendrick can tell the bull is concerned about the approaching dawn. Schmendrick closes his eyes and concentrates, letting himself indulge in the hopelessness he feels. Magic surges through him and he knows he’s done something but isn’t sure what.
The Red Bull stops, nosing something on the ground in front of him. When Schmendrick and Molly look, the unicorn has been replaced by a young woman, pale with long, white, cascading hair. The Red Bull loses interest and flees. Molly cradles the girl’s head in her lap and asks Schmendrick what he’s done. Schmendrick is thrilled at his magical capabilities, but Molly is horrified at the result. They use Schmendrick’s cloak to cover the girl’s naked form.
Schmendrick, still jolly from his feat, says he’ll be able to change her back when the time is right and when the magic decides. He justifies the unicorn’s transition by explaining that she had to be something else for the Red Bull to leave. Molly criticizes the decision to turn her human, but Schmendrick adds that the magic chose the form. As the sun rises, the girl begins to wake. She examines her form for a few minutes, wordlessly. When she finally speaks, she asks what Schmendrick has done to her.
Schmendrick explains his reasoning, but the unicorn thinks a fate with the Red Bull would have been better than to be subjected to the body and mind of a human mortal. She still fears the Red Bull, adding that he’s older than she is. She begins to cry out, asking again what Schmendrick has done. She claws at her skin, making marks and drawing blood. She calls her body a cage. Molly stops her from hurting herself and covers her again with Schmendrick’s cloak to hide her from herself. The girl says she can feel her body rotting and dying around her.
Schmendrick tells the story of his mentor, Nikos, who declared Schmendrick’s “incompetence so profound” (149) that there must be a great magic within him. Nikos cursed Schmendrick with immortality, not allowing Schmendrick to age until he has mastered his magic. Schmendrick, like the unicorn, is trapped in a body much younger than his mind. The spell will be broken when Schmendrick learns to use magic properly. He encourages the girl to come with him and Molly to Haggard’s castle to complete their journey, but the girl begs to be transformed back so she can return to her forest. Schmendrick cannot change her back, however, because he does not have control of the magic.
As the girl ponders her new form, feeling the flower-like bump on her head where her horn used to be and watching Haggard’s castle for the bull, Molly and Schmendrick fall asleep, exhausted from their long night.
The two helmet-clad sentinels of King Haggard’s castle, which sits on a cliff above the sea, watch as Schmendrick, Molly, and the girl approach. One sentinel is certain that it’s one man and two women approaching, but the other sentinel is uncertain about the girl, saying she is “different from anything [he] had ever seen before” (154). They converse about the approaching people, with one sentinel observing how new the girl seems, that she is experiencing everything for the first time. They go down to meet the party at the gates. The sentinels ask who the people are and what their business is. Schmendrick introduces himself and Molly then makes up the name Lady Amalthea for the girl. Schmendrick states he’ll only discuss his business with King Haggard and asks to see him. The older sentinel leads the group inside while the younger sentinel follows, fixated on Lady Amalthea.
As they move through the dark and depressing architecture, something rumbles and shakes the tower. The younger sentinel tells Amalthea not to be afraid, as it’s only the Red Bull. Finally, they arrive in a barren room with a chair at one end and no other furniture or decorations. The older sentinel declares that they’ve arrived at King Haggard’s throne room. Schmendrick argues that the room resembles a tomb and demands to be taken to Haggard. The older sentinel removes his helmet to reveal he is King Haggard. The younger sentinel reveals himself to be Prince Lír, whom Molly recognizes as the prince that was to be wed to the princess that tried to call the unicorn.
Schmendrick says they wish to join Haggard’s court, trying to entice Haggard with the benefits of keeping more people around. However, Haggard has tried to live the life of a King with a large court, but it did not make him happy. He has little tolerance for things that don’t bring him happiness. Schmendrick argues that a wizard could make Haggard happy. Haggard already has a wizard named Mabruk, but Schmendrick notes that Mabruk does not make Haggard happy. Haggard summons Mabruk and informs him that Schmendrick is taking his place. Mabruk recognizes Schmendrick as one of Nikos’s apprentices and informs the king of Schmendrick’s infamous incompetence. King Haggard replies, “A master magician has not made me happy. I will see what an incompetent one can do” (165). Before Mabruk departs, he stares into Amalthea’s eyes and declares that Haggard has allowed his doom into the castle.
Haggard examines Schmendrick, Molly, and finally Lady Amalthea, who is staring out the window at the sea. Haggard also enjoys watching the sea, but when he looks into Amalthea’s eyes he becomes frustrated at their depth. He demands to know who she is, not believing she’s Schmendrick’s niece. Prince Lír says it makes no difference because she is here now.
Haggard expects Schmendrick to perform for him and Molly to work as a cook and a maid. He permits Lady Amalthea to come and go as she pleases. When Haggard leaves, Prince Lír offers to find quarters for them. He is enamored by Lady Amalthea and wants to do everything he can for her.
Chapters 7 through 9 continue the hero’s journey formula as the questing party enters the “innermost cave” starting with Hagsgate and proceeding to King Haggard’s castle. The innermost cave is the destination where the final conflict must be resolved. These new settings reveal many things about the characters living at King Haggard’s castle. Haggard is characterized as a man with no close family or friends, who keeps a bare minimum of staff on hand and has a barren castle in the middle of his blighted kingdom. The only exception is Hagsgate, which Haggard regularly tours once the town has gone to sleep for the night. As Hagsgate is the first village outside of Haggard’s castle, Haggard has a false sense of success, being unaware that the curse on his castle affects Hagsgate as well. The appearance of Prince Lír is prophetic to the people of Hagsgate. Because the townspeople have avoided having children, Prince Lír’s origins are mysterious and magical, making it significant that he is now being raised by King Haggard himself. Drinn comments, “I know the birth of a hero when I see it” (122), stressing the importance of Prince Lír to the witch’s curse. Prince Lír’s magical origins are emphasized again in Chapter 9, when Lír is drawn to Lady Amalthea, singing “What is happening to me? I cannot tell whether to be glad or afraid. What is happening to me” (158). Prince Lír’s immediate attachment to Lady Amalthea helps to hint at a deeper magical force at play.
The unicorn’s transformation is foreshadowed in Chapter 4 when Schmendrick argues that a wizard’s presence is beneficial to a unicorn. He tells the tale of his master, Nikos, transforming a unicorn into a man to save him from hunters. The unicorn tells Schmendrick that “[Nikos] did [the unicorn] no service, but great ill” (58) and refers to being trapped in a human body as “trapped in burning houses” (58). Thus, when the same fate falls on the protagonist unicorn, her reaction is one of disgust and devastation. The unicorn-turned-woman exclaims that “This body is dying. I can feel it rotting all around me” (149) and attempts to hurt herself. She even refers to her body as a cage, paralleling her imprisonment at the Midnight Carnival. This transformation builds on the themes of The Loss of Innocence and The Tragic Inevitability of Aging. The unicorn, in her purest, truest form, represents innocence. She has never known a world as cruel and unforgiving as the world she experiences outside of her forest. The world has become so disillusioned that it cannot even recognize her as a unicorn. This concept is expanded upon when the unicorn becomes unrecognizable to herself. After her transformation, the unicorn has lost her purity. Through this transformation and her experiences with humans, she has gained an understanding of the world that dampens her innocence. With the transformation, she is no longer an enchanted creature but instead an ordinary mortal, trapped in a body that can and will die around her. This newfound mortality helps to emphasize the unicorn’s horror at her new body. Knowing now that she will certainly die, she asks “Why did you not let the Bull kill me?” (147). The unicorn believes any fate that could befall her as a unicorn is a better fate than dying as a human, stressing how tragic and terrifying the concept of mortality is to her.
When Schmendrick reveals his own curse in Chapter 8, his story and the unicorn’s story become parallels. Schmendrick’s master Nikos mused that his “ineptitude is so vast, [his] incompetence so profound, that I am certain [Schmendrick is] inhabited by a greater power than I have ever known” (149). For this, Nikos curses Schmendrick to “not age from this day forth [...] until at last you come to yourself and know what you are” (150). Like the unicorn after Schmendrick has transformed her, Schmendrick is trapped in a body much younger than his mind. Schmendrick, having not mastered his magic, cannot grow older until he rectifies his incompetence. This curse of immortality is diametrically opposed to the unicorn’s plight as a human. Whereas the unicorn wishes to return to her perfect, immortal form, Schmendrick wishes to return to mortality, allowing his youthful body to grow old. Schmendrick’s story is another instance of fulfilling foreshadowing, as he commented in Chapter 3 that he is “older than [he] look[s]” (44). Finally, Schmendrick’s curse contributes to the theme of the Fear of Mediocrity. In addition to having to face his multitude of failures, Schmendrick is haunted by the knowledge that every failure is one more failed chance at lifting his curse and returning to mortality. Not only is his mediocrity a nuisance to himself and others, but he also suffers the consequences from it in his every waking breath, knowing that he will outlive those around him if he continues to fail. The curse embodies the very real consequences of mediocrity for Schmendrick, giving him more urgency to succeed as the story moves forward.
The pitfalls of mediocrity are evident in Chapter 9 as the setting shifts to King Haggard’s castle. King Haggard lives a life of mediocrity, pursuing happiness with impatience and intolerance for anything that does not bring him happiness. The castle has a “rainy, doggy smell” (158), and the throne room is so devoid of decoration, “no rugs, no draperies, no tapestries” (159), that Schmendrick remarks “This is a cell. This is a tomb. No living king sits here” (159). Haggard’s four men at arms “take their turns as sentries, and as cooks, and they give the appearance of an army, from a distance” (161). The king’s mediocrity is so profound that even his army is no more than a few men taking turns. Haggard’s castle walls are the only thing that can hide the sad state of his affairs. Haggard is so used to his mediocrity that he fires his loyal and talented royal magician in favor of Schmendrick, whose incompetence is widely known. King Haggard and his fortress are embodiments of mediocrity and are the envy of no one.
Before departing, Mabruk, Haggard’s former royal magician, warns Haggard that he’s “let [his] doom in by the front door, though it will not depart that way” (167), referring to Schmendrick, Molly, and Lady Amalthea. This, coupled with Hagsgate’s prediction that Prince Lír will break the curse and bring about the downfall of the castle, serves as heavy foreshadowing for how the events of the novel will proceed.
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