Summary
Mercedes goes to the captive rebel as he is being brought back to the camp, and she begs Vidal to let her into the storeroom, but he refuses her. Back inside, Mercedes sulks as she chops vegetables, before bringing supplies up to the doctor and Carmen. Carmen is feeling much better as a result of the mandrake root.
In the storeroom, Vidal taunts the rebel with his cigarette, and he refuses to give up any information. He pulls out a hammer and pliers, threatening the rebel with them, then torturing him for information.
That night, Ofelia is awakened by the faun. She tells him that she had an accident completing the second task, and shows him the purse with the fairy inside. The fairy tells the faun what happened, and the faun scolds Ofelia for breaking the rules. "I thought no one would notice!" she pleads, but the faun tells her she cannot return to the labyrinth, that the moon will be full in three days, and that her spirit will forever remain among the humans.
Vidal calls the doctor to visit the rebel, who is badly wounded from the torture. As Vidal observes the doctor examining the patient, and looks at a bottle of antibiotics, the rebel confesses to the doctor that he spoke out to save himself. When Vidal leaves, the rebel begs the doctor to kill him.
Elsewhere, Vidal realizes that the doctor has been helping the rebels, just as the doctor is euthanizing the rebel. Vidal orders a soldier to keep an eye on the doctor, while he goes upstairs to check on Carmen. There, he finds Ofelia tending to the mandrake root under the bed and pulls it out to examine it. He pulls the mandrake out of the bowl as Ofelia pleads for him not to. This awakens Carmen, who agrees with Vidal that the mandrake root is nonsense. When Vidal leaves, Carmen tells Ofelia to stop using the mandrake root, as Ofelia begs her mother to take her away from the camp. "When you get older, you'll see that life isn't like your fairy tales. The world is a cruel place, and you'll learn that someday, even if it hurts," Carmen says, throwing the root into the fire.
When Ofelia cries out, Carmen runs to her and insists, "Magic doesn't exist, not for you, me or anyone else." As the mandrake burns on the fire, Carmen begins to suffer convulsions.
Back in the storeroom, Vidal confronts Doctor Ferreiro about his disloyalty. "To obey like that, for the sake of obeying, without questioning, only people like you can do that," the doctor says, and leaves. As Ferreiro walks away, Vidal shoots him in the back.
Carmen gives birth to a child, with great struggle, and dies in the process. The scene shifts to her funeral, and Mercedes comforts a grieving Ofelia.
The scene shifts again and we see Vidal confronting Mercedes about the fact that she knew the doctor well. "The stutterer spoke of an informer, here at the mill," Vidal says to her, hinting that he suspects it might be her. He invites her to sit and asks what she thinks of him. He orders her to go to the storeroom and get him more liquor, and when she goes to leave, he reminds her that she needs his key, as he has the only copy. He then discusses how curious it was that the lock wasn't forced open when the rebels blew up the storeroom, further hinting that he knows she was the informer.
Mercedes leaves the house, and gathers some letters from a hiding spot, before preparing to escape from the camp. She wakes Ofelia to tell her she's leaving, and Ofelia begs Mercedes to take her along. Together, they go out in the rain, wandering into the forest. Turning, they come face to face with Vidal and his men, who bring them back to the house. Vidal hits Ofelia and questions her about how long she's known about Mercedes. He orders a guard to watch Ofelia in her room and to kill Ofelia if anyone tries to come and save her.
Vidal examines Mercedes' things as she is tied up to be tortured. "I was invisible to you," Mercedes says to him, as he prepares a hammer and other implements to torture her. As he gathers them with his back to her, she pulls a knife out of her pocket and cuts herself free, before stabbing him in the back and in the heart, then slashing his face.
She wanders away, and two guards notice that she's escaped. Vidal, still alive, limps out of the storeroom and orders the soldiers to bring Mercedes to him, but she runs into the forest. They chase her through the trees, and eventually surround her.
Analysis
As the narrative progresses, Vidal's evil and ruthlessness only deepen and he is shown to be a merciless and corrupt leader. When he captures the rebel, he threatens him with blunt and horrible tools, torturing him until he gives up some information about the rebel forces. He barely displays any sense of human decency, thinking only of his aims and treating human beings as means to an end. Vidal's villainy seems to know no bounds.
Running in parallel to the conflict in the human world—the apprehension and torture of the rebels—is Ofelia's failure to correctly navigate the world of fantasy and the labyrinth. When he finds out that Ofelia failed in her previous task, the faun is exceedingly angry, scolding her for her disobedience and damning her to a life among the humans, one in which she will age and die and be forgotten. Ofelia's only hope of escape from the mundanities of society and reentering her rightful place among the fantastical creatures of the underground kingdom is completely dashed in this section of the film.
In a devastating turn of events, Carmen and Vidal discover Ofelia's mandrake root concoction under Carmen's bed, and dismiss it as a foolish child's game. The devastation comes from the fact that we the viewer know that the mandrake root is what is causing Carmen's miraculous recovery, but neither Carmen nor Vidal believe this, and they dismiss Ofelia's attachment to the potion as mere child's make-believe. The viewer is put in the position of a child, being scolded for believing in magic.
In this moment, the thematic core of the film is revealed, when Carmen says to Ofelia, "When you get older, you'll see that life isn't like your fairy tales." Carmen's words put forth an argument that is the opposite of what director Guillermo del Toro is arguing in the film overall, which is that the world of fairy tales bears an unusual resemblance to the adult world that Carmen warns against. In both fairy tales and in normal human society there are horrifying monsters, trusted allies, and rules to be followed. While the adults in Ofelia's life are unable to see the magic that is guiding their lives, Ofelia and the viewer know that magic is ever-present, woven into the fabric of the everyday, and that it functions in similar ways to the ordinary logic of our world.
Ofelia's only friend after her mother's death is Mercedes, who finds herself in grave danger after being discovered as an informer for the rebels. Ofelia and Mercedes are imprisoned by the evil Vidal and subjected to his merciless treatment. The two women share a bond and each must now fight in their own ways to break free from the punishing treatment of the fascists, but hope looks bleak. In this section of the film, tension builds and it becomes unclear whether good will prevail after all.