Charley Hexam has transferred to a better school after showing academic promise. He now studies in a school outside London and hopes to one day run his own school. Six months have passed since his father’s death and a year since John Harmon’s body was found. Bradley Headstone, one of Charley’s teachers, wants to meet with Lizzie to determine whether she is a positive influence on Charley.

As Charley and Headstone leave for the meeting, they run into Miss Peecher, a teacher who is in love with Headstone, though he does not love her. She uses her student, Mary Ann, to keep close tabs on Headstone. When Charley and Headstone arrive in the rundown neighborhood where Lizzie, who now works as a seamstress, is staying, they are met by a strange child. The “little figure” claims to be the head of the household, telling the visitors that Lizzie will be back soon. The child has a very adult manner and explains that she makes dresses for dolls.

When Lizzie returns, she greets the visitors. Charley is upset by the squalid living conditions in which he has found his sister. As they take a walk, he suggests that she move to a new home.