The Unicorn revives Lír with the healing touch of her horn. Now king after Haggard's death, he attempts to follow the Unicorn despite Schmendrick advising against it. As they pass through the now-ruined town of Hagsgate, they learn that Drinn is actually Lír's father, and that he had abandoned him in the marketplace on purpose to fulfill the prophecy. Realizing that he has new responsibilities as king after seeing the state of Hagsgate, Lír returns to rebuild it after accompanying Schmendrick and Molly to the outskirts of his kingdom. The Unicorn returns to her forest. She tells Schmendrick that she is different from all the other unicorns now, because she knows what it's like to feel love and regret. Schmendrick and Molly later come across a princess in trouble and he tells her to go to Lír because he is the hero to save her. Schmendrick and Molly leave this story into another as they sing a love song together.