After distinguishing between knowledge and true judgement, Theaetetus recalls being told that true judgement 'with an account (logos) equates to knowledge (201d). Things without an account are 'unknowable', while things with an account are 'knowable'.
Socrates responds by telling of a dream, in which he overheard people talking of primary elements (201e). These primary elements can only be named, they cannot be thought of as existing or not - he gives examples of words like 'itself, or that, each, alone or this' (202a). While they can be added to other words, they by themselves are just a name. When these elements are added together, Socrates says that a 'complex' is formed (202b). The primary elements are 'unaccountable and unknowable, but perceivable' while the complexes are 'knowable and expressible' and so can be objects of 'true judgement' (202b). He concludes his dream by agreeing with Theaetetus that knowledge is 'true judgement with an account' (202c).
However, Socrates exposes some difficulties by examining letters. He takes the first two letters of his name, S and O to wonder if the syllable 'So' is knowable while the individual letters are not (203b-d). Theaetetus finds the idea strange, so Socrates deduces that in order to know the syllable, the letters must be known first (203e). Socrates proposes that the syllable can be a 'single form' produced from the letters. With this in mind, Socrates considers whether the 'sum' and the 'whole' are the same (204a). Theaetetus initially says they are not, but changes his mind in confusion when Socrates leads him through maths and the different ways of expressing the number six (204c-205b). After agreeing this, Socrates returns to the subject of syllables and letters to conclude from Theaetetus' answers that syllables are different from letters and cannot contain letters (205b). Theaetetus admits this idea is ridiculous (205c). Socrates returns to talking about elements and complexes to propose that they are in the same class, as they have 'no parts and [are] a single form' (205d).
Socrates sums up this reversal by remarking that if anyone tries to tell them the complex is knowable and expressable while the element is the opposite, 'we had better not listen to him' (205e). He cites the example of a musician distinguishing individual notes (conceded to be elements of music) to propose that elements are 'much more clearly known'(206b).
Socrates proposes an account to be 'making one's thought apparent vocally by means of words and verbal expressions' (206d). However, he wonders if that is so, everyone will be able to make judgement 'with an account' as they can all (except for the deaf and dumb) vocalize and express opinions on matters (206e). Socrates examines it further by suggesting that a man who can vocalize his judgement must be able to make reference to the primary elements of the subject (207a). Giving an example of defining a wagon by its individual parts (207a), agreement is reached that an account is 'going through a thing element by element'(207d). Socrates questions Theaetetus by drawing on his learning of how to write, and the idea that if you misplace individual elements (letters) of a name, that does not mean you have knowledge of it (208a). This finishes Socrates' second definition of an account as 'the way to the whole through the elements' (208c). The third definition Socrates offers is 'being able to tell some mark by which the object you are asked about differs from all other things' (208c), giving the example that the Sun is distinct for its brightness. However, this definition of an account fails as by getting to know the differentness of an object, you have to acquire knowledge about it. Thus the answer to the initial question 'What is knowledge' would be heavily circuitous - correct judgement accompanied by 'knowledge' of the differentness, which Socrates admits is 'silly' (210a).