Mads is back in business and expands on all fronts and moves his family to a large villa outside of Korsbæk. The Varnæs couple returns from a trip to Paris, envigourated and with Maude bringing back something extra. The Varnæs home is to house a party with people whom they've met in Paris much to Laura's regret.

Jørgen Varnæs feels Mads' hand when Jørgen has taken an early Christmas vacation (on December 7) and has traveled to Switzerland. Upon his return a month later, Mads de facto reduces Jørgen's salary by half. Jørgen seeks help from his brother who is unable to provide any relief. Hans-Christian bites the bullet and seeks out Mads to speak for Jørgen.

As Oluf Larsen is arranging pictures of assorted fascists in his outhouse, he's surprised by Herbert Schmidt, returned from Spain. He's reunited with Vicki, who'd become a teacher at the private school (replacing teacher Andersen). World War II breaks out causing rationing of certain goods in Denmark (sugar and gasoline). Agnes is to wait at Daniel's confirmation party, leaving Lauritz to look after the children - with the most serious consequences.

Laura, having served the Varnæs family for 25 years, are going with Maude to Copenhagen to receive a medal for "loyal service". There, Maude, through a childhood friend meet a German who presents himself as a banker. Agnes, coming to see Laura get the medal, looks up Herbert Schmidt who's putting up a play called "The Boots" in Copenhagen.

Sofus Jensen, Korsbæk's beat policeman, seeks out Lauritz along with a police lieutenant early in the morning of June 22, 1941, the day Hitler declares war against the Soviet Union. The good nurtured officer feigns a story that Lauritz has already left the premises so as to give Lauritz a chance to escape. Lauritz seeks help from the Larsen family, and through Kathrine, Lauritz gets a lift to Copenhagen via a reluctant Mads.

Skjern's business is thriving despite the war and in part due to Daniel's help. The local resistance group launch sabotage missions, and the pictures of dictators in Larsen's outhouse has him thrown in jail, which puts the entire resistance-group in danger, causing Baron von Rüdtger to also get involved with the movement. Mr. Stein, Varnæs' trusted bank manager, falls victim to harassment due to his Jewish background, and later he must flee the bank as the Germans launch their endlösung hunt for the Danish Jews on October 1st 1943.