Previously in Varney the Vampire: Flora is a badass (to stay this time, I hope).
At the start of Chapter 37 (SIR FRANCIS VARNEY'S SEPARATE OPPONENTS. -- THE INTERPOSITION OF FLORA.), we learn that, while the Bannerworths miss Marchdale, they appreciate the Admiral's generosity and steadfast optimism. (The fact that the Admiral threw an ink desk in Marchdale's face goes unmentioned.)
Flora worries that Varney has killed Charles. Henry tries to reassure her but, not really believing it himself, goes to confront Varney about Charles's disappearance.
Do I really have to go on about how he's holding the Idiot Ball here? "Oh, yes, let me venture out alone to confront the vampire who has attacked my sister several times and possibly killed her fiancé, and who, to the best of our knowledge, cannot be killed. What a splendid idea that couldn't possibly put my life in danger!"
I'm sure this is on TV Tropes already and I've just forgotten the name, but Henry's actions (and similar actions in poorly-written stories) are less "Idiot Ball" and more "I Don't Understand Dramatic Irony Ball." That is to say, it doesn't occur to Henry that he won't be safe because the readers know he'll be safe. The first few times characters challenged or confronted the vampire, it was just stupid; but by this point, when we've gotten a better picture of Varney's character, we understand that he's not going to just kill for s***s and giggles.
Anyway, Varney denies having killed Charles and then goes back to his smug old self, toying with Henry:
"If," resumed Henry, "such was your object in putting Mr. Holland aside, by becoming personally or by proxy an assassin, you are mistaken in supposing you have accomplished your object."
"Go on, sir," said Sir Francis Varney, in a bland and sweet tone; "I am all attention; pray proceed."
"You have failed; for I now here, on this spot, defy you to mortal combat. Coward, assassin as you are, I challenge you to fight."
"You don't mean on the carpet here?" said Varney, deliberately.So Varney accepts the duel, Henry storms out ("I may not detain you, I presume, to taste aught in the way of refreshment?", Varney calls after him).
Meanwhile, the Admiral decides to challenge Varney to a duel himself, although his challenge is much more direct and profanity-laced; Henry asks Chillingworth to visit Varney the next morning; Chillingworth shows up at the same time as Jack Pringle; and I'm suddenly afraid that the story turned into a comedy of errors while my back was turned.
Chapter 38: In Which the Duel Subplot Becomes Even More Contrived