After you buy the slingshot, the kiddies are 10 kinds of hyped about you shooting crap with it. But the monkey from earlier had friends, it would seem,that sneak into the woods after causing a serious ruckus with the kids. Hoping for an adventure, they tear ass into the trees to catch the monkeys. Having just acquired a wooden sword from your pal, you head in as well, hoping to get the kids out before they're too lost.
But, of course, one makes it too far in. The deep woods act as a sort of mini-dungeon, designed to get your brain back into the Zelda puzzle world. There's only one key to find and a few random goblin enemies to attack, but overall, it's an easy time. Waving the wand for sword attacks works perfectly fine, and later on you get seven new combat strikes, so battles will become increasingly active as the story continues on.
After saving the kid (and the pain in the ass monkey) from the monsters, it's back to the town with you. Young Ilia sees the damage you've put Epona through and basically takes the horse away from you. This sucks because you need Epona for the super-important delivery tomorrow in Hyrule. So it's damage control time for Link as he tries to convince Ilia to give him back the horse.
Just after she does, however, an obese green creature storms through the fence on a giant, armored boar. He attacks Ilia as another rider sucker-punches Link from behind, sending him to the ground in one hit. As they begin to drag the girl away, the leader blows a horn, which creates a decidedly Tron-like hole in the sky, crackling with energy and general badness. After heading back to town, Link is sucked into a wall of darkness and within seconds transforms into a large grey wolf. Weakened from this change, he's carted off into a prison cell, awakened by a creepy, floating little devil girl named Midna.
