Chapter 13 - "The Secret Riddle" - In which Harry has his second lesson with Dumbledore, where they briefly discuss Mundungus and Draco, and Dumbledore discusses Merope with Harry again. Together, they then view a memory of Dumbledore's, where he visits Voldemort's childhood orphanage to invite him to school. In it, Dumbledore learns Riddle's history and discovers that he has already been using magic, hates his name, likes to steal and collect trinkets, and neither has nor desires friends.
A Confrontation With Mundungus
While walking to the [Three Broomsticks], Harry encounters Mundungus Fletcher - and discovers that he's been stealing objects from [number twelve, Grimmauld Place]. Mundungus manages to get away, and a depressed Tonks appears to try to calm Harry down.
The Cursed Necklace
On the walk back to school, the trio watches as an [Imperiused] Katie Bell gets into an argument with her friend [Leanne] and is hurt by the [cursed necklace]. Harry then grabs Hagrid, who takes Katie up to the castle.
Hermione and Harry quiz [Leanne] about the details of what happened to Katie Bell and realize the necklace is cursed and came from [Borgin and Burkes]; they then set off for the castle with it to show it to Madam Pomfrey.