Lady Stark and Sideburns enter King's Landing. Sideburns thinks Catelyn should probably disguise herself so people don't recognize her, but she pooh-poohs this. The last time she was here was nine years earlier, and no one recognized her then. As soon as she finishes saying this, a couple of horsemen ride up and greet her by name, saying they've been instructed to bring her into the city. Well, that went well!
They're brought into a whorehouse where they're met by Littlefinger (who's still being called Baelish in this scene). He claims that he meant no disrespect by bringing them here, and that he knew they were coming because he heard it from a "dear friend." And that would by Varys, who oils in and talks about how "knowledge is my trade, my lady." He even knows that they're here because they want to get information on this fancy dagger. Unfortunately, Varys only knows that it's Valyrian steel, not whose it is. But Littlefinger does! He's pleased to announce that it's his. However, that doesn't mean that he's the one who set the assassin on Bran. He says that he lost it on a bet, when the Knight of the Flowers unseated Jaime in the last tournament. And he lost it to...Tyrion Lannister! Drama! I'd react more strongly, but I'm a little distracted by the "Knight of the Flowers." Is that really the toughest name he could think of? He must be pretty good if he took down Jaime, but c'mon. Flowers?
Meanwhile, up at the Wall, Tyrion is watching Jon Snow be very good at fighting. A lavishly sarcastic man calls him "Lord Snow" and has the other new recruits attack him. They do not do well, and some of them get their noses broken. You'd think this would make him the belle of the ball, but his only reward is to be named "the least useless person here." Tyrion, watching the festivities with an older soldier named Commander Mormont, comments that the sarcastic guy is charming. I'm not sure you're allowed to use sarcasm to criticize someone else for using sarcasm. Mormont says that he doesn't need to be charming; he needs to be good at training people. Oh, and he's got a note for Lord Stark's son, which is both good and bad news. You know, for a story that's already spread across two continents, people get messages surprisingly quickly and accurately.
Pycelle brings Lord Stark a note from Winterfell. See? From the size of the map and the lack of cell phones, you'd think he'd be out of Winterfell's range. When Pycelle has tottered off, Littlefinger comes up with a smirk (remember: Tommy Carcetti from The Wire) and asks, "Good news? Perhaps you'd like to share it with your wife." Ned says that his wife is in Winterfell, so Ned leads him to the whorehouse. Lord Stark (he's "Lord Stark" when he's angry) thinks this is a joke, and so he grabs Littlefinger by the neck and shoves him against the wall, calling him a "funny man." I'm not sure Lord Stark knows what a "joke" is. Before he can kill Littlefinger, Catelyn sticks her head out the window and tells him to knock it off.