Alone in the bunkhouse, George thanks Slim for giving Lennie a pup. Slim comments on Lennie's ability to work hard and mentions that it is obvious Lennie is not too bright. Slim then asks why Lennie and George go around together because most of the ranch hands he's seen are always alone and "[n]ever seem to give a damn about nobody."
Feeling comfortable with Slim, George explains that he knew Lennie's aunt. After her death, Lennie just naturally began staying with George and following him around. At first, George accepted Lennie's company because he could play jokes on Lennie, who didn't realize he was being made fun of. But one day, George told Lennie to jump into the Sacramento River, which Lennie did, even though he couldn't swim. Lennie nearly drowned before George was able to pull him out, and since then, no more jokes.
George also confides in Slim about Lennie's trouble in Weed: When Lennie touched a girl's dress, the girl screamed. Lennie got so scared that George had to hit him with a fence post to get him to let go. The girl claimed she had been raped, and so Lennie and George hid in an irrigation ditch and left in the night.
Carlson enters and complains bitterly about the smell of Candy's dog, offering to shoot it to put it out of its misery. Candy looks to the other guys, particularly Slim, for help with this decision. Slim sides with Carlson, and so Candy reluctantly lets Carlson take the dog out for execution.
Later, Crooks comes in, announcing that Lennie is petting the pups too much in the barn. Whit, another ranch hand, asks George if he has seen Curley's wife yet. George is noncommittal, and Whit remarks on her provocative dress. They discuss going into one of the town whorehouses that evening, and George tells Whit he might go but only to have a drink because he is saving his money for a stake.
Curley enters, looking for his wife. When he hears that she isn't there and that Slim is in the barn, he goes to the barn. Whit and Carlson follow, hoping for a fight. Disgustedly, George remarks that a whorehouse is a lot better for a guy than jailbait, and he mentions the story of a friend who ended up in prison over a "tart." Lennie loses interest and asks George once again about their farm.
Candy overhears their discussion and offers to contribute $300 toward the cost, if George and Lennie will let him join them. George eventually agrees, and then the three men muse on what their place will be like. They agree not to tell anyone of their plans. Candy admits he should have shot his dog himself.
The other guys filter back into the bunkhouse. Slim is angry at Curley for constantly asking about his wife. Curley, on the defensive and looking for someone to fight, picks a fight with Lennie and punches him unmercifully. Lennie doesn't protect himself until George tells him to fight back. When Lennie does, he crushes all the bones in Curley's hand.
Slim says they must get Curley to a doctor, but he cautions Curley that if he tells on Lennie and gets him fired, they will spread the word about how Curley's hand really got hurt and everyone will laugh at him. Badly shaken and in pain, Curley agrees not to tell. George explains to Slim that Lennie didn't mean to hurt Curley; he was just scared.
Because of what he has done, Lennie is afraid he won't get to tend the rabbits on their farm. George tells Lennie that it was not his fault and that he will get to tend the rabbits; then he sends Lennie off to wash his face.
In Chapter 2, Lennie sensed that the ranch is not a safe place for them. Chapter 3 brings that prophesy to light with a number of occurrences that are dark and violent. The death of Candy's dog and the crushing of Curley's hand are situations that have repercussions later. These dark images are balanced with Lennie's happiness in securing a puppy and the promise of being able to finally get their dream farm. Rather than alleviating the sense of foreboding, this juxtaposition of dark scenes with scenes full of promise serves to increase the reader's apprehension. The chapter ends with Curley's crushed hand and Lennie's (and George's) claims that Lennie didn't mean to hurt anyone, foreshadowing later events.
George and Lennie's relationship is further developed by Steinbeck in George's discussion with Slim. George makes his need for Lennie clear when he tells Slim about the incident at the river. George says, "… he'll do any damn thing I [tell him to do.]" Here the reader sees that George enjoys the opportunity to not only give Lennie advice, but also to be in charge. Lennie gives George stature. But now George uses that power carefully; he respects the fact that Lennie is not mean and would never intentionally hurt anyone. What George does not seem to realize is how dangerous Lennie's strength can be, a danger that Steinbeck makes clear when Lennie crushes Curley's hand.
Whit, a minor character, becomes important in this scene because he shows the life of a ranch hand when he isn't busy at his job. Whit reads pulp magazines, plays cards, and goes to Clara's or Susy's house on the weekend. He simply lives for today with no thought for his future and no concern for saving money, illustrating Steinbeck's point that sometimes our best intentions can be hurt by the human need for instant gratification or relief from the boredom.
Foreshadowing is heavy in this chapter with the repetition of the mens' attitudes toward Curley's wife. Whit asks George if he has seen her and ventures a comment on her appearance. Curley automatically assumes that she is in the barn with Slim, and the other guys follow him to the barn, assuming there will be a fight. George calls Curley's wife jailbait and refuses to go to the barn. He also mentions the story of Andy Cushman, a man who is now in prison because of a "tart." All of these events are Steinbeck's way of saying that something terrible is going to happen, and that Curley's wife will be involved.
In this chapter, the gloom is relieved by the hopeful planning of the three men — George, Lennie, and Candy — toward their dream. For the first time in his life, George believes the dream can come true with Candy's down payment. He knows of a farm they can buy, and the readers' hopes are lifted as well, as the men plan, in detail, how they will buy the ranch and what they will do once it is theirs. But while Steinbeck includes this story of hope, the preponderance of the chapter is dark. Both the shooting of Candy's dog and the smashing of Curley's hand foreshadow that the men will not be able to realize their dream.
The shooting of Candy's dog shows the callousness of Carlson and the reality of old age and infirmity. Carlson offers to shoot the old dog, complaining many times of the smell. He brutally keeps after Candy, and Candy's reaction can be seen in the adverbs Steinbeck uses to describe how Candy looks: "uneasily," "hopefully," "hopelessly." Candy reaches out to Slim for help, but even Slim says it would be better to put the dog down. "I wisht somebody'd shoot me if I get old an' a cripple" are the words Slim uses that Candy later echoes when he considers his own future.
Carlson is the stereotype of a macho male. He relentlessly pursues the dog's death, more for his own comfort (he doesn't like the dog's smell) than to put the dog out of its misery. He quickly and emphatically says he has a Luger that can do the job, and he has to be reminded by Slim to take a shovel so Candy will be spared the glimpse of the corpse. Carlson even cleans his gun in front of Candy after the deed is done. While it may be true that killing the dog put it out of its misery, little concern is shown for Candy's feelings after a lifetime of caring for the dog. Now Candy is like the rest of them — alone. The rough and brutal world of the ranch hand is revealed by Carlson's actions and then brought up once again with the brutality of Curley toward Lennie.
The unfortunate timing of Lennie's laughter is all the excuse Curley needs to fight the "big guy." Curley is a coward who would rather fight a big guy because, if he wins, he can brag about it, and if he is beaten, he doesn't lose face because the big guy should have picked on someone his own size. If Lennie were not mentally handicapped, he might have responded in a different way to the situation he finds himself in. But he is forced to make a scary choice, and, until George tells him to fight back, he simply takes the abuse. Lennie's fear is clearly on his face, and he says, "I didn't want to hurt him," when it is over. He does not really understand the repercussions of what has happened, and he is afraid that he has done "a bad thing." But the worst part of this whole scene is the uneasy feeling that somehow, somewhere, Curley will not forget this permanent injury, not only to his hand but also to his pride.