The Mad Hatter is holding a tea party, and the Mad Hatter asks Alice if she knows what day of the month it is. Alice says it's the fourth, but in actual fact, as the Mad Hatter says, she's off by two days.

The Mad Hatter has a large pocket watch that doesn't tell him the time, but rather the day of the month. However, as he holds it to his ear, it becomes clear that it's not working properly. It's then that he turns angrily to the March Hare:

I told you butter wouldn't suit the works!

Apparently, the March Hare had smeared butter over the watch's mechanism to make it tick. Not surprisingly, it hasn't done the trick. Even so, the March Hare remains quietly defiant:

It was the best butter.

The March Hare says these words meekly because he knows that he's responsible for the Mad Hatter's watch not working properly. But at the same time, he doesn't want to lose face and so makes the completely irrelevant point about the butter being of the very best quality.

But the March Hare's attempts to justify himself are all in vain. The Mad Hatter tells him that some bread crumbs must've got into the watch. Once again, the Mad Hatter is certain that the March Hare is to blame for his watch not working. It's all his fault.