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Nick is captivated by Gatsby and finds him an enigma. He immediately sees a difference between the rest of the East Egg rich and the way Gatsby comports himself.
Gatsby's parties are obscenely lavish. The guests marvel at Gatsby's Rolls-Royce, his enormous swimming pool, the live musicians he engages weekly, the sumptuous food that he provides for hundreds of people, and, perhaps most importantly, the unlimited liquor he generously supplies. Nick is eventually invited to one of these parties, but not by Gatsby himself; instead, Gatsby's chauffeur brings an invitation to Nick's door.
Gatsby's mansion is packed with revelers when Nick arrives. Very few of them seem to be invited guests, and even fewer have met Gatsby face to face. It is a very mixed crowd: East Eggers rub elbows with West Eggers, and people from New York high society meet those from "the wrong side of the tracks." Nick runs into Jordan Baker, who is even more casually bitter than usual because she has recently lost a golf tournament. All around them, people gossip about their mysterious host. They speculate that he once killed a man in cold blood or that he was a spy for Germany during World War I.
Jordan and Nick go looking for Gatsby in his mansion; instead, they find a grotesque little man in enormous eyeglasses (Nick calls him "Owl Eyes") skimming through the books in Gatsby's library. Both Owl Eyes and Jordan initially think that the books are false, designed only to give the appearance of a library; both are surprised to find that the books are real.
Outside, in the garden, Nick strikes up a conversation with a handsome, youthful man who looks familiar to him; it turns out that they served in the same division during the war. This man is the mysterious Gatsby. Gatsby has an affected English accent and a highly formal way of speaking. He stands aloof from his guests, watching the party rather than taking part in it. Gatsby leaves to take a phone call; later, he sends his butler to ask Jordan Baker if he may speak with her privately. When she finishes talking to Gatsby, she tells Nick that she has heard some "remarkable" news.
At about two in the morning, Nick decides to walk home; on the way, he sees Owl Eyes, who has crashed his car into a ditch. Owl Eyes loudly proclaims that he is finished with the whole business; it is not clear (either to Nick or to the reader) what, if anything, he means by this.