After crossing the bridge into the living city, Severian is in need of lodging. He shares a bed with the giant Baldanders. He has a vision-dream of undines and puppets. In the morning he meets Doctor Talos.
Baldanders - the giant. He is so tall that eight-foot merlons are only as high as a railing to him.
Uroboros - in the Commonwealth it seems to mean the equator, a body of water that separates the north from the south at the equator, a giant monster that resides on or underneath the equator.
The dream Severian has while sharing a bed with Queequeg, I mean Baldanders, should not be ignored. Keep it fresh in your mind. In particular, note that there is some of the giants below the water seemed like ships. It will come up again.