The war ends, and the Bulgarians and Serbians sign a peace treaty. Raina's father (Major Paul Petkoff) and Sergius both return home. Raina begins to find Sergius both foolhardy and tiresome, but she hides it. Sergius also finds Raina's romantic ideals tiresome, and flirts with Raina's insolent servant girl Louka (a soubrette role), who is engaged to Nicola, the Petkoffs' manservant. Bluntschli unexpectedly returns so that he can give back the old coat, but also so that he can see Raina. Raina and Catherine are shocked, especially when Major Petkoff and Sergius reveal that they have met Bluntschli before and invite him to stay for lunch (and to help them figure out how to send the troops home).