Before dawn, Emily sees the white strands of the aurora being drawn down into a nearby valley and realizes they mark a courtly faerie gathering. Because Wendell's violence against the bogles has convinced Emily that he is too unpredictable to risk among stronger faeries, she leaves him sleeping, takes the hidden golden chain, collars Shadow, and sets out alone. As Emily and Shadow cross into Faerie, Shadow grows into a great wolfish hound, confirming that they have entered the enchanted realm.

From a ridge, Emily discovers a winter fair spread around a frozen lake, full of courtly fae who look nearly human when faced directly and spectral when seen indirectly. Shielded from the music by Shadow's presence, Emily forces herself into the market, pretends to belong there, and observes that the faerie food, drink, and ornaments all dissolve into nothing for her. Emily finally spots Lilja and Margret skating together under enchantment; Lilja shows brief flashes of awareness, which gives Emily hope that the girls can still be saved.

A greedy faerie lady notices Wendell's enchanted improvements to Emily's cloak, and the crowd's interest around the garment conveniently draws Lilja and Margret close. Emily uses Shadow's magic to muffle the music for the girls, and Lilja quickly begins to return to herself, while Margret remains only partly recovered. Then a higher-ranking winter faerie lord, armed with an ice sword, dismisses the crowd and privately demands Emily's cloak. Emily bargains for safe silence and a path out of Faerie, but the lord refuses the path and instead exchanges the cloak for a thick white fur cloak, insisting that surviving the cold matters more than escape.

Emily, Lilja, and Margret leave the fair as quietly as possible, reverse the girls' cloaks, and use the Word to make themselves less noticeable. Once away from the market, Emily realizes the bargain has not freed them: her old footprints vanish, dawn never comes, and no matter how long they walk, they cannot find Wendell's camp or the mortal world. Emily discovers that the new cloak is enchanted to produce needed items from its pockets, beginning with a compass, and Lilja uses it to guide them south and east.

The cloak proves useful but stingy, later giving only a flask of water while the group grows more exhausted and hungry. Shadow searches constantly for a break in the boundary between worlds, but Margret weakens, and the three women are forced to shelter in a cave. Emily ends her account uncertain whether Shadow can find a way out, and fearing that if he cannot, their only chance may be to return to the Hidden Ones who trapped them.