Maria suggests to Olivia that Malvolio is possessed, as while Olivia is thinking of Cesario, Malvolio comes in wearing yellow stocking cross-gartered
Olivia tells Malvolio to go to bed to recover, Malvolio takes this as a sexual invitation, and he quotes Maria's letter so that Olivia concludes that he has gone mad
Olivia goes to meet Cesario, leaving Malvolio convinced that she will marry him
Misinterpreting Olivia's mention of ST, Malvolio is rude to him and after Malvolio is gone ST promises the conspirators to continue their joke
SA challenge to Cesario is read out, but after SA leaves ST tells Fabian he won't deliver the letter because it's comical, instead he decides to deliver a challenge by word of mouth so as to strike fear into Cesario
Viola returns at Olivia's command, but only to ask her to love Orsino
ST tells Cesario that SA wants a duel with Cesario and ST encourages SA to fight Cesario but Antonio enters and thinks Sebastian is the one in danger
Before Antonio can go and warn Sebastian, he is arrested and appeals to "Sebastian" for help but Viola replies that she doesn't know Antonio which leads to Antonio being taken away
After Antonio is taken away, Viola wonders whether the mystery might mean that Sebastian is alive
A number of plots come together in this scene
Malvolio's humiliation isn't subtle, he is contrasted with the puritan and strict character he was earlier in the play
The mistaken identity where Antonio gets arrested shows the disparity between external and internal appearance