On HMS Indefatigable, Captain Pellew orders Hornblower to sail his prize to Portsmouth with extremely important dispatches, and to destroy them if necessary to keep them out of enemy hands.
As the journey starts, Le Reve is caught in a fog and sails into the middle of the Spanish fleet, which Hornblower mistakenly believed was anchored at Cadiz.
He confides to Hornblower that he recognizes the Duchess as Katherine "Kitty" Cobham, a London actress; they surmise that she deceived them to obtain passage home.
As the senior officer, Hornblower accepts blame and is forced to spend time in the same hole that previously held Kennedy, which is open to the elements and so small it does not permit a prisoner to sit or stand.
Hornblower volunteers himself and his crew to brave the rough seas and rescue those aboard Almeria, pledging his word of honor that they will return to the prison.
On board Indefatigable, the Duchess returns the dispatches to Pellew, who informs Hornblower that he has been promoted to lieutenant for his bravery in the fireship attack on Gibraltar.
Indefatigable departs for England with the Duchess as a passenger, and before she leaves Hornblower promises to keep her secret and she pledges her permanent friendship.