While Rostam sleeps, a dragon appears. Rakhsh, his loyal horse, strikes his hoof on the ground, the dragon vanishes, and Rostam wakes. Rostam is cross with Rakhsh because Rakhsh has woken him up. This happens twice more. Each time Rostam is saved by the help of Rakhsh but each time Rostam reprimands him.

Finally, Rostam sees the dragon. They fight, Rakhsh bites the dragon, and Rostam cuts off its head. That's how the third labour of his tale is.