Heather awakens on the boat and pretends to sleep, eavesdropping on Uncle Wilfred and Smalls. They debate going to the dangerous First Warren to warn the authorities or seeking refuge at Cloud Mountain. No firm decision is reached before Picket stirs and interrupts. After Picket wakes, Wilfred tends to the group’s injuries. Picket feels inadequate compared to the capable Smalls and harbors a growing resentment. Heather asks about her family, and Wilfred tells her that they’re best considered gone for now, and probably forever. This news devastates the children, and Picket becomes physically ill. Wilfred explains that he and Smalls came from the now-ruined Great Wood and were too late to prevent the attack. He confirms that he saw their parents and baby brother hurt but alive at the burning elm, though he can’t speak to their current fate. Overwhelmed by grief, Picket lashes out at Smalls, who tells Picket that his anger at evil is justified. As they approach their destination, Decker’s Landing, they’re horrified to see that it’s on fire.

The group sees wolves on a ridge above the burning Decker’s Landing. They quickly hide their boat and prepare to escape into the nearby forest. Smalls scouts ahead while Uncle Wilfred urges Heather and Picket to stay hidden. Picket, still resentful, acts defiantly, and Wilfred scolds him for his ingratitude, reminding him that Smalls saved Heather. Smalls signals that it’s time to run. As they sprint for the cover of the woods, Picket looks back, trying to prove his bravery, but he trips on a rock and falls. He’s injured and exposed. Without hesitation, Smalls runs back, scoops Picket up, and carries him to the safety of the trees.

As the group flees deeper into the forest, Picket’s resentment toward Smalls continues to fester. His foot is in agony, but pride prevents him from accepting help, and he struggles to keep up. Seeing his pain, Heather calls for a rest stop. Uncle Wilfred confronts Picket privately, telling him that his foot is fractured and that his stubborn pride is endangering everyone. Wilfred reveals that his primary duty is to protect Smalls and that Picket’s behavior is making this impossible. Humiliated, Picket suggests that they leave him behind, but Wilfred refuses and insists on carrying him. To warn him against resentment, Wilfred alludes to the story of Whitson Mariner, but Picket bitterly identifies with the story’s resentful character, Rangel.

Picket feels humiliated as Uncle Wilfred carries him up a misty mountain. They arrive at a cave entrance called the Savory Den, where they’re challenged by a hidden voice. Wilfred and Smalls respond with a coded phrase, and a group of armed rabbits led by Pacer appears. Soon after, their leader, Lord Rake, emerges from the cave. Rake and Wilfred embrace in an emotional reunion. Rake welcomes Heather and Picket and is saddened to learn that his friend Tommy Decker was killed by the wolves. In response to the news, the assembled rabbits solemnly declare that such tragedies will not happen in the future “Mended Wood.”

Two rabbits, the chef Gort and a young apprentice doctor named Emma, emerge from the Savory Den. Emma tends to Picket’s injured foot with a friendly, teasing demeanor. Inside the cave’s large dining hall, Picket notices a solitary, brooding black rabbit whom the other rabbits avoid. While they eat, a charismatic rabbit named Kyle introduces himself and charms everyone at the table. Emma warns her that Kyle is a “mischievous, self-centered hooligan” (140). Lord Rake formally welcomes the newcomers but explains that they’re subject to the “law of initiates” (141), a trial period during which information is restricted for security. As Emma leads the exhausted group to their quarters, Wilfred quietly tells Rake that he didn’t know the black rabbit was there. Emma tells them that their new home is a “seed of the new world” (143).

Heather and Picket wake in a room decorated with beautiful paintings. Heather recognizes the glen in one large painting from a similar work in their old home; her mother once told her to look for that place if she were ever lost. The painting is initialed “F. S.” Emma arrives with a pair of finely carved crutches for Picket. She identifies the artist “F. S.” as Finbar Smalls, a celebrated painter from the Great Wood’s golden age. Heather and Picket are startled by the name because they assume that Finbar must be Smalls’s father. Emma explains that Finbar was killed years ago, along with her own family, during the chaos that followed the fall of King Jupiter. Contemplating their shared losses, Picket sadly asks if the whole world is orphaned.

Emma explains to the siblings that the Savory Den is a secret entrance to a larger community hidden higher up the mountain. After another excellent breakfast from Gort, Emma gives Heather and Picket a tour of their new home, Cloud Mountain. Picket declares his ambition to become a soldier. Emma leads them through a hidden door and up a long staircase toward a brilliant, multicolored light. At the top, they find themselves in the King’s Garden, an indoor greenspace beneath a vast glass ceiling. Ahead is an octagonal building with colored glass panels called Lighthall. Above its door hangs a banner bearing Lord Rake’s crest of two diamonds, one red and one green.

Emma leads them through the indoor garden, where they see statues of the legendary heroes King Whitson Mariner and Blackstar. Picket is deeply moved by Blackstar’s statue. They pass through a guarded door into a circular hub called Hallway Round. From there, another door opens onto a sunlit, terraced hillside. This is the main village of Cloud Mountain. There, they meet Heyward, a gardener comically obsessed with his hedges. Kyle appears and tells them a fantastical story about a hidden land called Terralain and another about a secret, ailing heir to King Jupiter hidden in a labyrinth beneath the mountain. Emma dismisses his tales as lies. Their attention is drawn to the brooding black rabbit, whom Emma identifies as Helmer the Black, a mysterious and disgraced knight. When a small child wanders near Helmer during his sword practice, he growls at her to leave. He then draws his sword and runs, causing Heather to scream in terror.

Helmer runs past the mother and child, slashing at ropes tied to a large maple tree. His actions trigger a deadly training gauntlet that he has built. Wooden birds of prey armed with knives and swords swing down at him from all angles while bladed wolf dummies block his path on the ground. The community watches in horror as Helmer fights for his life against his own creation. He’s skilled but quickly becomes wounded and overwhelmed. As he’s about to be struck down, Lord Rake, Uncle Wilfred, and Smalls intervene. They work together to disable the swinging contraptions: Smalls fires arrows to topple the wolf dummies fencing Helmer in while Wilfred catches Smalls’s thrown sword mid-air, uses two blades to slice the ropes, and then hurls the borrowed sword back to Smalls. Although Helmer is pulled to safety, a rebounding bird contraption swings back and hurtles directly toward the now-vulnerable Smalls.

Just as the bladed bird is about to strike Smalls, Uncle Wilfred throws his sword point first, severing the rope and saving him. A strange rabbit with a thick accent, Doctor Zeiger, arrives and tends to Smalls’s injured feet, declaring that the wounds aren’t serious. Nearby, Lord Rake angrily reprimands Helmer for his life-threatening recklessness. When Helmer approaches to check on Smalls, Wilfred coldly orders him away. However, Smalls stops him and, looking at Helmer’s back, recites a solemn oath of loyalty: “My place beside you, my blood for yours, till the Green Ember rises, or the end of the world” (191). A shaken Helmer quickly departs. Doctor Zeiger confirms Picket’s diagnosis, tells Emma that Picket’s resentful mindset needs more healing than his physical injury, and prescribes “much Maggie, and hold the Helmer” (193), which leaves Heather puzzled.