Irene and Minnie have seen Cornelius and Barnaby about to enter the hat shop and decide to flirt with them and drop them like a rock. The guys come into the shop pretending to be shopping for ladies hats but almost everything they say comes out wrong. They happen to notice their employer, Horace Vandergelder, sitting on a bench across the street waiting for Dolly.

When Cornelius and Barnaby see Vandergelder heading for the shop, Cornelius hides in a cupboard and Barnaby disappears under a table. Vandergelder is questioning Irene about two men he thought he saw in the shop and demands an explanation when Dolly enters. Vandergelder says he will not stand for this. Dolly and Irene tell Vandergelder what they stand for (Motherhood, America and a hot lunch for orphans) all the while trying to get Cornelius and Barnaby out of the shop.

After the song they're all in their original positions--Cornelius in the cupboard, Barnaby under the table. Cornelius sneezes, Dolly has done all she can, says "God Bless you" and Irene gives up and tells Vandergelder there IS a man in the cupboard and another under the table. Dolly pretends to be astounded that the room is crawling with men and Vandergelder storms out taking his chocolate-covered peanuts (unshelled--that's the expensive kind) with him.

Dolly's plans are working perfectly.......