If you haven't read the earlier parts yet or need a refresher here's the story so far:
Because the narrator Jake Jarvis suffers from writer's block, he had recently moved to Sparklewood. His daily deliveries of buns and milk appear to be stolen each morning. During one night he notices a large shadow running from his garden. He is drawn to lights at the house of his neighbour Mrs. Roosebud, but upon entering he is thrown out by her.
While checking facts for a new story at the library Jake learns that his house is built on a so-called fairy ground. The previous inhabitant left because of odd accidents long ago. A second effort to befriend his neighbour Mrs. Rosebud fails miserably. The next night he lays in wait for the milk thief, but misses him. The same night sees him getting back to writing again, although he develops some suspicions about his motivations.
The police doesn't take him seriously after he had revealed he's a writer and suspects fairies to be at work. Frustrated he cancels all orders. In the afternoon a Mr. Miller visits him and urges him to move out because of impending fairy activities, but Jake doesn't take him serious. In the early morning the police officier Pauline Harker wakes him up, because she had secretly (but in vain) watched for the milk thief. After a shared breakfast they agree to declare the case as unsolved, but closed.
In the early afternoon he discovers someone has destroyed the tires of his car. Next to his car he finds a large banknote. A few hours later he is arrested because he seemingly tried to pay for the new tires with counterfeit money. He is brought to the police station where he is questioned for several hours.
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