On Dill's last night in Maycomb, the kids all go down to Miss Rachel's fishing pond. While there they happen to see Mr. Avery across the street urinate in the light of the streetlamp. He appears to do it from ten feet away, which leads Jem and Dill to have a literal pissing contest. After that, the boys want to peep into the Radley house, and they go sneaking into the yard. Jem and Scout hoist Dill up so that he can see through the broken shutter. When Dill doesn't see anything, they try the back window, where they nearly get caught by Mr. Nathan Radley.
The kids narrowly manage to escape. Scout trips amongst collards, and Jem gets his pants caught in the fence after Nathan fires his shotgun, assuming that the children are really an African American man who is trespassing on his property. The town, hearing the gunshot, comes out into the street, where Dill makes up a lie about winning Jem's pants while playing strip poker in order to cover up what really happened. Atticus is suspicious of this lie but accepts it, and Dill goes to Miss Rachel's for the night, stopping only to kiss Scout goodbye, having remembered that they are engaged.
Later that night, Jem goes back for his pants but refuses to let Scout come with him. The two of them have been sleeping on the screened back porch, so Atticus doesn't hear him leaving. Scout freezes for a moment because she hears Atticus's cough and fears that they have been caught, but it proves to be a false alarm. Jem comes back and refuses to talk about what happened, though he is clearly shaken up. They both have trouble falling asleep that night.
"One-Eye, Two-Eyes, and Three-Eyes" by the Brothers Grimm. One of the many German fairy tales collected by the Brothers Grimm. In it, Little Two-Eyes is a young girl shunned by her mother and two sisters, who hate her for having "normal" eyes. When a knight comes along, Little Two-Eyes's sisters hide her under a cask in the hopes that the knight will speak to them, instead. This doesn't work out for the two sisters, and Little Two-Eyes winds up marrying the knight. Jem alludes to this story to suggest that he and Scout are Little One-Eye and Little Three-Eyes, respectively.
Sound. This is the first chapter where sound (and the lack of it) makes a real impact on the narrative. As the children walk down the street, they listen to the sounds of porches creaking, lights flickering, distant characters laughing. Lee uses these sounds to create an apprehensive feeling in the reader and contribute to the spooky mood associated with the Radleys. The creeping silence they hear is broken by the loud blast of Mr. Nathan Radley's shotgun, which scares the children both because it's a deadly weapon and because the sound is so forceful. Later that same night, when the silence sets in again, Scout and Jem have trouble falling asleep, because they think any little sound could be Boo Radley coming to get them.