Varys. He says the bells ring for horrors like dead kings and sieges. Tyrion says they also ring for weddings, but he and Varys are in general agreement that weddings belong with the other two things. Tyrion is being buckled into a Tyrion-sized suit of armor by a boy that Varys thinks is named Podrick. Tyrion says that Varys knows the name of every boy in King's Landing. When Varys asks him to explain this comment, Tyrion says that his suggestion was perfectly clear. Varys asks if Tyrion trusts his squire and Tyrion says he does. So Varys brings over a map. There are fifty miles of tunnels underneath the city, because the Targaryens built the city to withstand a siege. And, Varys points out, they also built it so it could be escaped. Tyrion says he's not going to escape. Varys is politely skeptical. He's also got the news that Stannis has "taken up" with a red priestess from Asshai. Tyrion doesn't care, but Varys reminds him of the old powers. Tyrion doesn't buy any of that. Varys guesses that Tyrion trusts only what he's seen. Varys tells him that he (Varys) has seen things. The implication is that Varys has seen dark powers in action.
Somehow, this leads Varys to say, "I don't believe I've ever told you how I was cut." Did you forget he was a eunuch? He's a eunuch. And he's got an enthralling story about it. But he's not going to tell it right now. Tyrion meets the eyes of Podrick, because some things you just have to shrug at somebody about. Varys says the dark arts have given Stannis his armies and he can think of nothing worse than a man like that on the Iron Throne. And tonight, he believes that Tyrion is the only man who can stop him. Podrick hands Tyrion an axe. Tyrion should be good with an axe. After all, it's the traditional Dwarven weapon. I am equal parts proud and ashamed of that joke. That's a lie -- it's almost all pride.
Back out to the boats and they're close enough to hear the bells. Matthos says they're welcoming in the new king, but Davos says bells never mean surrender. Davos says they can counter with their own music. Start the drums! And sure enough, all the boats have cool war drums. We see Stannis briefly, but he's just looking out to sea. It's very picturesque.