Romeo is mopey, and doesn’t want to dance or get into the spirit of celebration, whereas Mercutio wants the whole group (especially Romeo) to cut loose and have a good time. This sets up their wordplay based humor: Romeo uses sole/soul to describe his lack of enthusiasm, Mercutio uses “bound” as jump, and Romeo replies using “bound” as tied, Romeo uses “done” to say he’s not going to have fun that night, and Mercutio uses “dun” as brown and swampy. This comes up again in act 2 scene 5, when Mercutio and Romeo engage in a playful battle of wits (once Romeo is in a good mood again), and in act 3 scene 1, when Mercutio engages in the same sort of playful banter with Tybalt, to disastrous results.
Romeo tries to explain that he does not want to go because he had a dream last night. Mercutio replies that he also had a dream about how dreamers lie. Romeo tries to explain that he thinks that his dream was important or a vision of his future, causing Mercutio to launch into his improvised Queen Mab speech:
Queen Mab's chariot is made of natural elements or pieces of plants or natural things in the forest. The wild and natural vibe to her description calls to mind the pre-Christian druidic and pagan belief systems in Northern Europe before the rise of Christian dominance. These traditions and cultures would have been passed down in secret by Shakespeare’s audience, and the styling here would call to mind feelings of wilderness and unpredictability.
In this passage, Mercutio establishes a pattern of a type of dreamer, a body part with which Queen Mab interacts, and the kind of dream created as a result (with a connection between the three). His sexism is seen here, as the only type of person who is described with a negative tone is ladies. His descriptions of the dreams of soldiers start to get violent and absurd: cutting throats, and drinking toasts from wine cups 30 feet deep.
In this passage, Mercutio’s language becomes frantic and unintelligible. Most directors stage this as Mercutio’s madness taking over, and the group starts to feel frightened by his wild unpredictability. Romeo interrupts and brings Mercutio back to earth.
Romeo pleads with Mercutio to calm down, complaining that he’s not making any sense. Mercutio turns this back on Romeo, explaining that of course he’s not making any sense, because he’s talking about dreams, which are nonsense made by unfocused sleeping brains. In this, we can see that Mercutio has outwitted Romeo by tricking him into agreeing that dreams are nonsense. The whole sequence characterizes Mercutio as unpredictable, creative, thrilling for the group, but also as manipulative, and at times frightening in his upredictability/madness. Benvolio closes out the interchange by bringing everyone back to earth by pointing out that if they don’t hurry up, they’re going to miss dinner.
Romeo shares his concern that he has a feeling that something bad will happen this night that will lead to his premature death, but he decides to put his trust in fate, and he goes along with the group, resigning himself to his destiny.