On the third day, it is immediately evident that Hylas has descended into full-blown skepticism. He argues essentially that nothing can ever be proven, that there will always be limitations to human knowledge, and that because of this, nothing can be said to actually exist. When Philonous points out that he knows he is standing on a rock, Hylas takes exception to the use of the word “know” and further argues that nothing can be fully known in the exact sense of the word.

Philonous, who to this point has made the argument that matter does not exist outside the mind that perceives it, now makes the surprising claim that this is no cause for skepticism. He contends that because his mind perceives objects in the world, these objects are real. Hylas again engages with Philonous on the topic of whether sensible things are real or perceived. The crisis of faith Hylas is experiencing stems from his inability to dispense with this distinction between reality and perception: For Hylas, to be real means to exist outside the mind; therefore if nothing exists outside the mind (as Philonous has convinced him) then nothing is real.