As Jeffrey winds his way up Dorothy's apartment staircase, Bobby Vinton's "Blue Velvet" rendition plays in the background. When he arrives at her door, Dorothy is dressed in red, and without any words, they first kiss passionately. She lures him back to her bedroom, as the sonic signature of the cavernous howling in the ear is heard. In close-up, their naked bodies make love on the blue-silky sheets of her bed:

Dorothy: What do you want to do?
Jeffrey: I'll do anything.
Dorothy: Are you a bad boy?
Jeffrey: What do you mean?
Dorothy (dreamily): Do you want to do bad things? Anything? Anything?
Jeffrey (whispering): What do you want?
Dorothy (begging): I want you to hurt me.
Jeffrey: No, I don't want to hurt you. I told you I want to help you. Dorothy, I know some of what's happening. Frank has your husband and son doesn't he? You've got to do something. Go to the police.
Dorothy: (Startled, she sits up and pushes herself away.) No police!! No police!! (The visual motif of the flame appears, as she cowers before him.) Go on, hit me. Hit me!
Jeffrey: No, no.
Dorothy: Get away! Get away from my bedroom!

In an unbelievable imitation of the sado-masochistic, insectile Frank, however, Jeffrey (while rescuing Dorothy!) is goaded into slapping her in the mouth. He overcomes his resistance to abusing her after she begs him to please her - her moist red lips appear, with sparkling white teeth. Again, he hits her - as the flames grow and the animalistic howling sound intensifies during their violent, erotic love-making in the darkness:

Dorothy: I have your disease in me now.

Afterwards in the living room, Jeffrey is dressed and playing with the propeller hat, spinning it and making some music. Dorothy rushes down the hallway and grabs the hat, holding it to her chest before putting it down:

Dorothy: It used to make me laugh.
Jeffrey: I'm sorry, Dorothy. I should go.
Dorothy: Yes. You think I'm crazy don't you? I want you to stay. Don't hate me.
Jeffrey: I don't hate you.
Dorothy: I'm not crazy. I know the difference between right and wrong.
Jeffrey: That's good.
Dorothy: You're my special friend. I still have you inside of me. It helps me. I need you.
Jeffrey: I'll call you.
Dorothy: OK. Soon?
Jeffrey: Um, mm.
Dorothy: Would you lie to me? Are you sure?

As they leave her apartment, suddenly Frank and three of his misfit friends come into view, where they discover Dorothy with the young man. Frank ridicules his new "neighbor," instinctively sensing that the "good kid" actually frequents Dorothy's apartment for the same reasons he does [Frank represents the dark side of Jeffrey - a side of himself that he has repressed and denied]:

Dorothy (to Frank): Hello baby.
Frank: Who is this f--k?
Dorothy: A friend, he's from the neighborhood. We were just talking.
Frank: Oh, you're 'from the neighborhood.'
Jeffrey: Yeah.
Frank: You're a neighbor. Well what's your name neighbor?
Jeffrey: Jeffrey.
Dorothy: He's a good kid, Frank.
Frank: Shut the f--k up! Hey, you want to go for a ride.
Jeffrey: No thanks.

But Frank grabs Jeffrey and forces him as an unwilling passenger to take a harrowing "joyride" around the neighborhood. During the fast and very crazy ride, begun with the squealing of burning tire rubber and the opening of the headlight panel on the front of the car, the vehicle careens into a sleazy section of town lined with shops in hot neon colors. Wearing her blue velvet robe, Dorothy sits next to Frank in the front seat, with Jeffrey wedged in the back seat between Frank's cohorts, Raymond (Brad Dourif) and straw-hatted Paul (Jack Nance). His vision blurred by the speed of Frank's car that races toward Ben's place, Jeffrey is further taunted and threatened. Frank's goons call Jeffrey a "p---y" who hasn't yet gone to "p---y heaven."

When they reach where they are going, a house of prostitution run by Ben and identified by a pink neon sign in the window - "THIS IS IT," Frank skids to a halt, announcing their arrival: "This is it," and then proceeds to have a short discussion of beer preferences at the entrance with Jeffrey held at knife point. Frank criticizes Jeffrey's imported beer choice:

Frank: What kinda beer do you like?
Jeffrey: Heineken.
Frank: Heineken! F--k that s--t! Pabst Blue Ribbon!

In one of the film's most striking scenes, Ben (Dean Stockwell), the effeminate, clownish, kabuki-like, Queen Bee proprietor-pimp and host of the small-town bordello greets them in the outer room of the filthy gangster's den. With mascara, lipstick, and ambiguous sexual/gender orientation, he is dressed in a gaudy, ruffle-fronted tuxedo and sporting a cigarette holder. The hellish brothel is peopled by several over-bloated, heavily made-up whores and a fat man - it is a veritable insect hive of insect creatures. Frank is impressed by the effete look of his homosexual/pimp friend:

Suave. God damn, you are one suave f--ker.

With an affected air, Ben asks one of the overweight prostitutes dressed in black to get some beer glasses so they can drink a case of Pabst Blue Ribbon beer:

Ben: Darling? Darling, could you bring some glasses and we'll have a beer with Frank. Thank you. Please sit down.
Frank: S--t man. How the s--t are ya?
Ben: Fine, Frank, fine. How are you?
Frank: F--kin' good. I'm real f--kin' good.

Recalling Dorothy's earlier violent knife-point attack, Jeffrey is threatened with castration by a switch-blade knife snapped open and retracted by Raymond: "Here today, gone tomorrow." Frank is impatient and wants to start drinking with his low-life friends:

Frank: Where's the glasses? That beer's gonna get warm. One thing I can't f--kin' stand is warm beer. It makes me f--kin' puke!
Ben: Darling? Where's the glasses? Here, Frank. Here are the glasses. Here are the glasses.
Frank: Raymond, where's the f--kin' beer man?
Raymond: It's right here Frank. You want me to pour it?
Frank: No, I want you to f--k it. S--t yes. Pour the f--kin' beer.

Frank suggests that they drink to "f--kin'," and asks Ben to toast: "Here's to your f--k Frank." Again, Frank is impressed by Ben's manner: "Suave, man. You're so f--kin' suave." After socking Jeffrey in the face for not being polite, Frank forces Jeffrey to mimic him and repeat: "Here's to Ben" while holding him up by the back of his collar. Although pretending to show concern for Jeffrey's face ("Thank you for the toast. That was a very nice neighbor. Did he hurt your little face?"), Ben follows suit and brutally slugs Jeffrey in the stomach, causing him to double over. Then, while Frank and his buddies laugh, Ben asks Jeffrey: "That feel better?"

Frank excuses himself from everyone's company ("Excuse us por favor") and follows Ben into another room, where Frank receives a wad of bills from the pusher. He pops a pill, followed by a swig of beer. Jeffrey eavesdrops and hears:

Frank: Gordon went right up to 'em in broad daylight of course, cause he's the man, right? And he took all those drugs away. It was f--kin' beautiful. Candy colored clown they call the Sand Man.

Frank orders Raymond to let Dorothy see her small son, Donny, who is being held hostage there.

Uh, let Tits see her kid huh!

Dorothy is led to a back room and from behind a closed door, Jeffrey hears her crying out to her imprisoned small boy:

Donny, Donny, Donny. Oh no, no, Donny, Momma loves you!

Frank convinces Ben to send him into a semi-erotic rapture by regaling him with a seductive, tour-de-force lip sync of a tape playing Roy Orbison's "In Dreams." As a ghoulish "candy-colored clown," Ben is grotesquely lit by a workman's industrial light (which functions doubly as a spotlight and as a microphone) and performed as if he is a singer on stage. While leaning against a wall, he croons to an imaginary, illusory lover found in his dreams:

A candy colored clown they call the Sandman
Tiptoes to my room every night
Just to sprinkle stardust and to whisper
Go to sleep everything is all right.
I close my eyes. Then I drift away.
Into the magic night. I softly say
A silent prayer. Like dreams do.
Then I fall asleep
To dream my dreams of you.
In dreams, I walk with you.
In dreams, I talk to you.
In dreams, you're mine, all the time.
We're together...

From the side, Frank watches the freakish performance with an intent look, as he did while watching Dorothy sing in the nightclub. But by the end of the mimed song, Frank grimaces in pain, both agitated and hurt by the connotations of sexual homo-erotic attraction between himself and the gay singer. [The song provides further proof of the film's central theme of simultaneous desire and revulsion.] Ungratified, he abruptly turns off the cassette tape and then orders everyone to leave:

All right. Let's hit the f--kin' road, we're givin' our neighbor a joy ride. Let's get on with it. Bye, Ben. Anyone, uh, want to go on a joy ride with us. How about you? Huh?

Dorothy has returned to the group and he asks her: "Hey, no smile for Frank? No? OK. F--k it. Let's go." One of the tarts joins Raymond in their group. Then in a shattering voice after Ben turns out his surreal microphone/light, Frank announces that the mood-altering pills have psyched him up, and the darkness has brought his lethal, aggressive potency to full bloom:

Now it's dark. Let's F--K. I'll f--k anything that moves.

To the screech and roar of the car's engine, the yellow strip down the middle of the two-lane road flashes by as they go over 100 mph. [A reference to the Yellow Brick Road in The Wizard of Oz?] Nervously, Dorothy asks Frank: "Where are we going Frank?" and he replies: "I'm takin' your neighbor out to f--k the country." Angered by seeing Dorothy look into the back seat at Jeffrey, he swerves the car off the road and screeches to a halt in front of a deserted lumber mill at Meadow Lane - the industrial site where Dorothy's husband is being held prisoner. Frank turns around and violently asks Jeffrey:

Frank: F--k. What are you lookin' at?
Jeffrey: Nothing.
Frank: Don't you look at me F--k. I shoot when I see the whites of your eyes.

Taking out his plastic inhaler mask to regain his sado-masochistic sexual feelings, Frank breathes in the gas and then gleefully tells Jeffrey: "You're like me." Then he turns toward Dorothy in the front seat and opens up her robe to fondle and painfully pinch and squeeze her breasts, making them red as he degrades her. Maddened, Jeffrey has seen enough and defends Dorothy by crying out: "Hey leave her alone." He punches Frank hard in the face.

In another of the film's truly terrifying, offensive scenes, Frank furiously turns and stares toward Jeffrey, ordering Raymond to get Jeffrey out of the car. Jeffrey is dragged from the vehicle and restrained by his pals on the side of the car, and held at knifepoint. Frank continues to inhale gas from his mask and smear his face with red lipstick. After painting his face, he repeatedly forces kisses on Jeffrey, transferring the lipstick to his face and emasculating him in the process. Ordering the playing of "In Dreams" on the car's cassette tape player in the background, Frank taunts him: "You're f--kin' lucky to be alive." While the pink, plumped-up and mini-skirted prostitute dances on the roof of the car to the tune, Frank terrorizes and abuses Jeffrey. He threatens Jeffrey to quit being "a good neighbor" to Dorothy or he will be killed by "a love letter" bullet. He communicates his demands by distorting the metaphor of the lyrics of the song "Love Letters Straight From Your Heart" [played later on the soundtrack of the film just before the final confrontation between Frank and Jeffrey]:

Don't be a good neighbor to her. I'll send you a love letter straight from my heart, f--ker. Do you know what a love letter is? It's a bullet from a f--kin' gun, f--ker. If you receive a love letter from me, you are f--ked forever. Do you understand, f--k? I'll send ya straight to Hell, f--ker!

And then he repeats some of the lines of the song to Jeffrey:

In dreams, I'd walk with you.
In dreams, I'd talk to you.
In dreams, you're mine. All...forever in dreams.

Frank takes the small square swatch of blue velvet cloth and begins wiping and caressing Jeffrey's red-painted lips with it. Then he raises his arms and flexes his biceps, overtly flirting and asking Jeffrey to feel them: "Feel my muscles. Huh? Feel 'em. Huh? You like that?" Suddenly, he severely brutalizes Jeffrey, hitting him in the stomach and face, as Dorothy screams for him to stop. The howling sound returns and the flame burns as the screen turns to black.

The next morning, Jeffrey wakes up from unconsciousness and his descent into hell. He has suffered a bloody nose and a swollen, bruised face, lying amidst the mud and discarded junk of the deserted logging factory. As he limps up the muddy dirt road, he notices it marked with a sign "MEADOW LANE." Back in his own bedroom, he sits on the side of his bed and silently cries to himself. Momentary flashbacks recall his hitting Dorothy while making love, the propeller-hat, the sounds behind the back door at Ben's place and Dorothy's red lipsticked lips.

Calling Sandy, he tells her that he's "lucky to be able to call..." and because he "know(s) some things," Sandy persuades him to tell her father. Jeffrey appears in the kitchen at the sunny breakfast table where his aunt and mother are seated. When they notice his cuts and bruises, he assures them that he is OK, but they prod him further, wanting to have him talk about it. Jeffrey responds by threatening his aunt in a good-natured, yet violent way: "Now Barbara, I love you, but you're gonna get it."

At the Lumberton Police Station, Jeffrey rounds the corner with the photographic evidence he has been gathering and stops short outside Detective Williams' office. There at the desk is the 'Yellow Man' - a police detective. Jeffrey freezes as their eyes lock, quickly turns away, and bends down at the water fountain to get a drink, keeping his back turned. As he swivels his head, he notices the name plate on the desk: "DET. T.R. GORDON" and the names on the door: "J.D. WILLIAMS, T.R. GORDON."

With an inner voice, he whispers: "Gordon," recognizing that Williams' partner is implicated in murder and illicit drug dealing. In a flashback, he remembers Frank's words to Ben and what he saw on the fire escape one day while trailing the 'Yellow Man':

Frank: Gordon went right up to 'em - in broad daylight of course - 'cause he's the man, right? And he took all those drugs away. And it was beautiful.

Jeffrey walks down the dark sidewalk that evening, carrying his incriminating photos in a large envelope. Outside the Williams' house, he hesitates and then rings the doorbell. When the detective answers the door, Sandy has just descended the stairs. They both are surprised by the bruises on his face - Sandy's father calls it a "bad face lift." By the look Sandy gives, she knows why he is there as he is led to the detective's study to share his secrets.

In the privacy of the detective's office, Jeffrey shows his picture of Frank Booth ("a very sick and dangerous man"), a second picture of Frank with the 'Yellow Man,' and a third picture of a "well-dressed guy" with them. He explains that Dorothy Vallens is in trouble with these people, and Frank has probably kidnapped her husband and son, but he lacks "hard proof of any of this." Jeffrey is also forced to lie, denying that Sandy had played any part, although Sandy's father isn't so sure:

Detective: Sandy better not be involved with this. I can tell you. Be prepared to come in for further interrogation on this later.

When Jeffrey leaves, Sandy displays some nervousness, and her father warns her: "There had better be nothing wrong."