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The dinner is being held by Bassanio, Launcelot's new master.
Launcelot, a servant with a comical sense, has been debating whether to leave the employment of his current master, Shylock. Shylock is arguably the "villain" of the play, and Launcelot reasons that his mistreatments by this "devil" are sufficient reason to quit, but he knows he would feel bad if he did. He would greatly prefer to work for Bassanio, a gentleman; when Bassanio appears coincidentally, Launcelot manages to express his interest in working for him. Bassanio agrees to this, and welcomes Launcelot's praise.
Launcelot then invites his old boss, Shylock, to dine that evening with Bassanio. Although we don't actually see Bassanio order this, it seems clear that this was actually Bassanio's idea; Launcelot would neither desire nor have the power to invite people to dinner. Likewise, Shylock has no desire to go to dinner, but goes anyway so that he can eat Bassanio's food out of spite, and to make some showing of how much better a master he really is.
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