The following day, Francis and Alan visit the carnival and find themselves drawn to the tent of Dr.Caligari. Inside, the hushed crowd are shown Cesare as he drifts in eternal sleep, only waking up to the command of Caligari. With a few words, the darkened eyelids of the somnambulist flutter open, as he slowly emerges from his trance, and he awkwardly takes a few steps away from his coffin. His appearance, tall, painfully thin and desperately pallid, fascinates the assembly, as does the remark that Cesare can predict the future. Alan boldly steps forward and enquires, "How long have I to live?", to which Cesare immediately replies, "Until dawn". The prophecy becomes reality later that evening as a shadow stands over Alan's bed, plunging a wicked knife through his feeble defense.
Francis obviously suspects Dr.Caligari and his associate and determines to investigate the murder, although the police are less convinced. They agree to consider the matter but before they have time to act another murder is committed, with the culprit caught after the slaying. It appears that the mystery has been solved, yet the next morning the criminal claims that he knows nothing of the first two murders. He simply hoped that his would be blamed on the unknown killer as well. As fearful uncertainty runs through the town, Cesare strikes again when he ventures into Jane's night-chamber. Fortunately the monster is overcome by her beauty and, instead, carries her off into the night. Simultaneously Francis is keeping watch over Caligari and Cesare, in their tent, convinced that neither have left their abode. The resolution of this contradiction provides the key to the entire episode, yet there are further (more horrific) levels to the tale.
Throughout this story the imagery of instability parades forth with twisted streets, over-hanging buildings, crazily squeezed rooms and contorted scenery. Using Expressionistic themes the connection with reality is both non-existent, in parallel with the unhinged mind of either Francis or Caligari, and incredibly unsettling. The inhabitants of this skewed world, especially the ghost-like Cesare, fit right in, twisting themselves terribly (both internally and externally) to accommodate their surroundings. The result is alien, unique and powerfully oblivious to the usual movie techniques - an impressive statement given the devastation of post-war Germany. It's also interesting that many of the standard horror conventions have their genesis in this movie yet it has had no successful direct imitators. Hence, while it's true that the acting is rather stagey (in accordance with the picture's feel), The Cabinet of Dr.Caligari is simply one of the corner-stone films of this century.