In Barcelona, on the square at the tavern Lorenzo, the people rejoice. Here and cheerful, playful Kitri, the daughter of the owner of the tavern, and her beloved Basilio. Lorenzo is not pleasing to the poor groom, much more to his heart a wealthy nobleman Gamache, who wants to marry Kitri.
The crowd cheers street dancer and bullfighter Espada. Total surprise is the appearance of the knight Don Quixote and his faithful squire, Sancho Panza. The traveler is invited to the table. Girls laugh at a fat man Sancho Panza. Don Quixote hurries to help his squire. Seeing Kitri, Don Quixote takes her for a lovely Dulcinea, who appeared to him in dreams, and that he had chosen “the lady of his heart.” But Kitri runs with Basil. Lorenzo, Gamache and Don Quixote go looking for her.
Kitri and Basilio are hiding in the tavern, where the fun and dancing youth. Suddenly appear Lorenzo, Gamache and Don Quixote. Innkeeper drags her daughter to Gamache and announce their engagement. Basil pretends suicide. Don Quixote in righteous indignation reproaches Lawrence cruelty and, at gunpoint, forcing him to accept his daughter’s marriage with a dying barber. Once Lorenzo blesses them, Basil “come alive.” He has nowhere to pretend dying.
Windmill. Beside her, in a clearing, located gypsy camp, where people come Kitri and Basil. Soon in the camp there and Don Quixote. The host invites Don Quixote to see the play of troubadours. Don Quixote excitedly following the progress of the play, and, forgetting that it is theater, rushes to the scene to up arms to defend the oppressed and wronged. He engages in battle with a windmill, taking its revolving wings for evil wizards, which he must hit. Prostrate, wounded Don Quixote makes Sancho Panza. Exhausted Knight falls asleep.
Sleeping Don Quixote pursue a vision: he in the realm of fairies and of which sees Kitri in the form of a beautiful Dulcinea.
Friends Kitri and Basil gathered to celebrate their wedding. A place of honor among the guests belongs to Don Quixote. Wishing the couple happiness, noble knight again hit the road