When the movie ends, the group realizes that Cherry and Marcia don't have a way to get home, since their Soc boyfriends left them. They decide to walk to Two-bit's house, so he can get his car and drive the girls home. As they walk, Cherry and Ponyboy talk about the differences between Socs and Greasers, and how it goes beyond money. In general, Greasers are more emotional than Socs. Ponyboy notes how well he can get along with Cherry, thinking, "Nobody but Soda could really get me talking. Till I met Cherry Valance."
Ponyboy finds himself telling Cherry about Mickey Mouse, a horse that Soda loved in the stables where he used to work when he was twelve. Mickey Mouse was mean to other horses, and sometimes even to Soda, but Soda loved him like his own. Then one day Mickey Mouse got sold, and Soda had cried all night. Ponyboy, who was ten at the time, saved up his money for a year hoping to buy Mickey Mouse back for Soda. However, Ponyboy doesn't tell Cherry about the part where his brother cried.
Cherry guesses that Ponyboy reads a lot, and that he watches sunsets. Ponyboy realizes that maybe "the two different worlds we lived in weren't so different. We saw the same sunset." Suddenly, Marcia sees a blue Mustang driving toward them; it belongs to the Soc boys, Randy and Bob. Johnny is petrified, but Marcia says to "act normal," and soon the car passes by. The Socs haven't noticed them.
Cherry asks Ponyboy about Darry, and Ponyboy honestly answers that "He's hard as rock and about as human... I bet he wishes he could stick me in a home somewhere, and he'd do it, too, if Soda'd let him." Two-bit says that Ponyboy is all wrong about how Darry feels, and Johnny says he's surprised that Ponyboy feels that way, since he thought they got along. Ponyboy feels stupid because he knows he has it good compared to the home Johnny lives in, where his parents beat him up. So Ponyboy lashes out at Johnny, saying, "An' you can shut your trap, Johnny Cade, 'cause we all know you ain't wanted at home, either. And you can't blame them." Johnny winces, and Two-bit defends Johnny.
Ponyboy apologizes, but now the whole group feels down. Ponyboy cries out "It ain't fair! It ain't fair that we have all the rough breaks!" He is talking generally, about all the Greasers' situations. Two-bit smiles and says, "Like it or lump it," and the girls awkwardly remain quiet, since they don't know what to say.
Once again, the blue Mustang appears, but this time it stops beside them and Bob and Randy get out. They start defending themselves to their girlfriends, at first ignoring the Greasers. Randy refers to the guys as "bums," and Two-bit gets defensive. He breaks the end off a bottle and hands it to Ponyboy, then flips out his own switchblade. Cherry begs them not to fight, and Ponyboy makes a point of pulling her aside and assuring her that he "couldn't ever cut anyone" with the bottle Two-bit handed him. Cherry understands, but insists that she must go with the Soc boys, since "we couldn't let our parents see us with you all." Ponyboy reminds her that "some of us watch the sunset too," and she catches him off guard by replying, "I could fall in love with Dallas Winston. I hope I never see him again, or I will."
After the Mustang leaves with the Socs in it, Two-bit heads off to find a poker game; Marcia has given him her number, but he tears it up. Ponyboy and Johnny lie down in their favorite deserted lot to watch the stars, even though it is freezing cold outside and they don't have jackets. They smoke and talk vaguely about their encounter with the girls and their boyfriends. Johnny says, "I can't take much more," speaking Ponyboy's thoughts exactly. They think about a place where there are no Greasers or Socs, just "plain ordinary people."
Ponyboy begins to dream about the country, which he idealizes. In his fantasy, his parents are alive again, and Darry no longer has that "cold, hard look;" he is "like he used to be, eight months ago, before Mom and Dad were killed." Johnny comes to live with Ponyboy's family in the county, and Ponyboy's mother even convinces Dally Winston that "there was some good in the world after all." Thinking about his dream, he accidentally falls asleep. Johnny falls asleep, too.
Johnny wakes Ponyboy up suddenly, and they realize it has gotten late. Ponyboy runs home, scared of facing Darry, but Johnny stays in the lot, since his parents don't care what happens to him. When Ponyboy gets home, Darry is up waiting for him, and Soda is asleep on the sofa. Darry is "madder than I'd seen him in a long time," and he starts to yell at Ponyboy for falling asleep in the lot, saying, "Ponyboy, what on earth is the matter with you? Can't you use your head? You haven't even got a coat on." When Soda starts to stick up for Ponyboy, Darry yells at him, too. Ponyboy says, "You don't yell at him!" In response, "Darry wheeled around and slapped me so hard that it knocked me against the door." The brothers stand in silence, since nobody in their family had ever hit Ponyboy. Darry screams, "Pony, I didn't mean to!" as Ponyboy runs away, back to the lot, deciding to run away.
He finds Johnny and tells him that they are running away, and Johnny joins him without questions. When they run out of breath, they start to walk and smoke. Ponyboy tells Johnny what happened at home. Johnny confesses that he likes it better when his dad is hitting him, because at least it means he's noticing him. He feels like he has nobody in the world, whereas Ponyboy has Soda, at least. Ponyboy assures him he has the whole gang, but Johnny insists, "It ain't the same as having your own folks care about you." Now Ponyboy is cold and decides he wants to go home, but just not speak to Darry.
Hinton uses the anecdote approach to tell the story of Soda's horse, Mickey Mouse. As Ponyboy tells the story to Cherry, the reader learns of it for the first time as well. The telling not only demonstrates how Ponyboy feels comfortable talking to Cherry, and revealing to her a story he's never told anybody else, but characterizes Soda as capable of intense love for something that he cannot own. It is also a demonstration of Ponyboy's love for his brother: he tries to save up enough money to buy Mickey Mouse back for Soda.
Appearances, especially the Greasers' awareness of how they look around the Socs, are prominent in Chapter 3. When the Socs stop the boys with Cherry and Marcia, "Two-bit took a long drag on his cigarette, Johnny slouched and hooked his thumbs in his pockets, and I stiffened." Ponyboy notes that, "We can look meaner than anything when we want to - looking tough comes in handy."
The theme of eyes plays a big role in this chapter as well. When Ponyboy lashes out at Johnny and tells him he's not wanted at home, "Johnny's eyes went round and he winced as thought I'd belted him." Ponyboy also reads Cherry Valance's eyes, too, though: when Two-bit hands him the busted bottle to fight with, Ponyboy pulls Cherry aside to assure her he could never use it, saying, "I had to tell her that, because I'd seen her eyes when Two-bit flicked out his switch." After Darry slaps Ponyboy, Ponyboy notices that "his eyes were huge."
Ponyboy dreams of the country as he lies in the vacant lot, watching the stars with Johnny. Whenever Ponyboy feels that his situation is unbearable, he escapes by fantasizing about how things could be different. In this case, he is frustrated about being a Greaser, and wishes his parents were alive and that his whole family could escape to the country, "out of towns and away from excitement."
Hinton foreshadows the event of the burning church rescue of Chapter 6. While Ponyboy and Johnny lie in the vacant lot, Ponyboy says, "I saw Johnny's cigarette glowing in the dark and wondered vaguely what it was like inside a burning ember..." The chapter ends with another bit of foreshadowing, as Ponyboy predicts that "Things gotta get better, I figured. They couldn't get worse. I was wrong." He feels that Darry hitting him is the low point; he doesn't yet know they are about to get jumped, and that Johnny will kill Bob.