Tim and Molly have returned home to London, but no one believes their excuse for being gone so long. Molly is grounded, and Tim is angry at what magic has done to his life.
He sees a cat, Filthy, and thinks it has a much simpler, happier life than he does.
A man sees Circe on the street, and thinks she's a prostitute. Annoyed, she invites him into her tattoo parlour, and he disappears.
Tim turns himself into a cat--a giant one at first, then normal cat size--and right away starts having trouble mixing his thoughts with the natural, simplified thoughts of a cat. He has enough focus to climb up to Molly's room, but she's gone, climbed out on a rope.
Molly is meeting with Marya, who's there with her unicorn. Molly conveys to her what Sir Timothy, as the dragon, told her in Hell--that he had sold his memories to demons, and that Tim might grow up to do the same, unless Molly got him to promise not to do so. Tim promised, but Molly didn't tell him why, and she's not sure whether to tell him. She's torn, because she loves Tim, but fears what he might become now. Then Circe shows up.
Tim, continuing to have trouble remembering he's a boy, keeps his mind on Molly enough to try to hunt her down by scent, with some newly-grown bat wings to help.
The still soot-covered Daniel hides on a roof, talking to the barley-working skull of Reverend Slaggingham. He saw Hamlet recently, and it makes him think about the difficulties in his life, and how he misses Marya.
Circe introduces herself and asks Molly for information about Tim. She says men are all the same, and seems to know about him. She offers to help the girls, as a proverbial sister.
As Circe does some magic, Daniel sees it, and starts to fly over.
Tim, as the cat, finds the ladies talking about him. Molly explains what she said before, and that she doesn't want to leave him. Marya says that she may not want to leave him because that might be what makes him turn to evil in the first place, like happened with her and Daniel. Unfortunately, Daniel shows up right when she says that.
Circe, meanwhile, sees Tim, and magically locks him into his cat form, and puts him in a cage. Then she blasts Daniel, who had been trying, however clumsily, to apologize. Her blast turns him into a whimpering dog, which she explains is the form of his soul.
While Molly sees this as cruel, Marya is completely taken with Daniel the dog, and cuddles him. She tells Circe to stay away from Tim, and Circe leaves with him in a cage, Molly not knowing that it's him in there.