Don Quixote Volume 2, Chapter 64
Everyone except Don Quijote are happy because he wanted to rescue Gregorio. Sancho reminds him that the fact they have no ship might have been a handicap in getting Gregorio back to Spain. Don Quijote sees this as an irrelevant detail. A few days later as Don Quijote is taking a walk to the seashore with Rocinante he meets up with another knight who is wearing full armor like himself. He identifies himself as the Knight of the White Moon and he has come to challenge Don Quijote to combat unless Don Quijote admits that the Knight of the White Moon's lady is a better-looking babe than Dulcinea. His terms are that Don Quijote return home for a year and lay down his sword, living quietly if the Knight of the White Moon wins. If he loses, he will give Don Quijote his sword, his horse and even his life if Don Quijote wishes. Don Quijote finds this knights arrogance astonishing!
Word travels incredibly fast in Barcelona and soon the governor and Don Antonio and a host of others join them at the seaside. The governor stands between them and asks why do they wish to battle. After checking with Don Antonio, who tells the governor that this is no joke of his, the governor gives them permission to fight believing it must be the joke of someone surely! Don Quijote and the other knight charge at the same time but the other horse is far stronger and faster than Rocinante leaving Don Quijote at a disadvantage. The Knight of the White Moon avoids using his spear but savagely knocks Don Quijote and Rocinante to the ground. Placing the point of his lance on Don Quijote's visor he demands that Don Quijote agree to the terms of his challenge. Don Quijote tells him to go ahead and kill him because he is not going to say some other woman is more beautiful than his Dulcinea. The White Moon Knight says he'll leave Dulcinea's beauty uncontested if Don Quijote goes into retirement. Don Quijote agrees to honor this term, and the knight rides away. The governor tells Don Antonio to follow him and find out his identity.
Rocinante is in shock and cannot move. Don Quijote is completely devastated. Sancho for once is speechless, so grieved is he.