In this scene Delta had just got done crying, because she doesn't have enough money to buy her husband a Christmas present. The setting of this scene took place in their cheap, 8 dollar flat.
Della realizes that her husbands gold watch isn't the only valuable thing they have. She grabs her coat and runs to Madame Sofronie's place, where you can sell hair. Della pulls her hair down and Madame Sofronie does not hesitate so say, "Twenty dollars".
Della rushes through stores to find Jim a present. She finds him the perfect chain for his watch.