Iago and Roderigo are introduced. They are plotting a scheme against Othello and end up telling Brabantio that his daughter married a "Moor". However, the intentions of both people are vastly different.
Othello and Desdemona celebrate their new marriage with the other soldiers in Cyprus. Othello puts Cassio in charge to make sure the men don't get to rowdy, while Othello and Desdemona consummate the marriage
Iago convinces Cassio to have fun and get drunk even though he's supposed to be in charge. What Cassio doesn't know is that Iago did this so he could Cassio in trouble with Othello.
This is where being drunk came back to haunt Cassio, as he stabs Governor Montano . This causes him to lose his job and his friendship with Othello.
Cassio is distraught and very sad. He does the worst thing he could do and goes to Iago for advice. Iago tells him that the only way to get his friendship back with Othello is through Desdemona
While that whole situation is happening, Othello and Desdemona share a lovely moment. Othello gives her a handkerchief that as given to him by his mother, to which she told him to give it to someone who he loves. So he gives it to her.