As Frisk enters the town, she takes a moment to look around after using the save point and stowing whatever items she has in that familiar box. It always strikes her as curious that none of the monsters ever question whether she's human. Frisk buys some food to use in battle—healing items to help her avoid dying so often. She even picks up a bandana that boosts her defense.
While exploring, she ran into that monster kid, who she'll be seeing more of later on. Eventually, she makes her way to the other side of town, where she comes face to face with Papyrus.
"Human! Allow me to explain some complex feelings—feelings like the joy of finding another pasta lover, the admiration for someone's puzzle-solving skills, and the desire to have a cool, smart person think you're cool. These feelings... they must be what you're experiencing right now. I can hardly imagine what it's like to feel that way. After all, I am very great. I've never wondered what having lots of friends feels like. I pity you, lonely human. But worry not—you shall be lonely no longer! I, the great Papyrus, will be your... No, no, this is all wrong. I can't be your friend. You are a human. I must capture you! Then I can fulfill my lifelong dream—powerful, popular, prestigious! That's Papyrus, the newest member of the Royal Guard."
And with that, the battle begins.
The familiar rectangular arena appears, giving her soul space to move. Frisk chooses to check first, and Papyrus launches a simple attack—bones sliding across the bottom.
Frisk decides to flirt.
"What? Fl-flirting? So you finally reveal your ultimate feelings! W-well, I'm a skeleton with very high standards."
Frisk replies, "I can make spaghetti."
"Oh no! You're meeting all my standards! I guess this means I have to go on a date with you. Let's date—l-later, after I capture you."
Papyrus repeats his bone attack. Frisk spares him, figuring that ACTing won't escalate the battle.
"So you won't fight? Then let's see if you can handle my fabled blue attack."
Frisk stays still, but suddenly her heart turns blue and falls to the bottom of the box—getting hit by a bone.
"You're blue now—that's my attack! Nyeh heh heh."
The battle grows more challenging. Frisk has to jump with greater care, taking a few hits and losing some HP. The bones begin moving up and down. Papyrus keeps talking about finally joining the Royal Guard, warning, "Give up or face my special attack."
After a while, he finally uses it.
"Behold! My special attack!"
Instead, a dog appears, happily chewing on the bone.
"What the heck? That's my special attack! Hey, you stupid dog, do you hear me? Stop munching on that bone!"
The dog drags the bone offscreen.
"Hey! What are you doing? Come back here with my special attack... Oh well, I'll just use a really cool regular attack. Sigh. Here's an absolutely normal attack."
The battle continues.
"Well... I... huff... It's clear... You can't... huff... defeat me."
"Yeah, I can see you shaking in your boots. Therefore, I, the great Papyrus, elect to grant you pity. I will spare you, human. Now's your chance to accept my mercy."
And with that, the battle ends as Frisk spares him.
"Nyoo hoo hoo! I can't even stop someone as weak as you. Undyne's going to be disappointed in me. I'll never join the Royal Guard, and my friend count will remain stagnant."
"Let's be friends," Frisk says.
"Really!? You want to be friends with me? Well then, I guess... I guess I can make an allowance for you! Wowie! We haven't even had our first date and I've already managed to hit the friend zone. Who knew all I needed to make pals was to give people awful puzzles and then fight them?? You taught me a lot, human."
"I hereby grant you permission to pass through, and I'll give directions to the surface. Continue forward until you reach the end of the cavern. Then, when you reach the capital, cross the barrier—that's the magical seal trapping us underground. Anything can enter, but nothing can exit... except someone with a powerful soul like you."
"That's why the king wants to acquire a human. He wants to open the barrier with soul power. Then we monsters can return to the surface."
"Oh! I almost forgot: to reach the exit, you'll have to pass through the king's castle—the king of all monsters. He is... well... a big fuzzy pushover. Everybody loves that guy. I'm certain if you just say, 'Excuse me, Mr. Dreemurr, can I please go home?' he'll guide you right to the barrier himself."
"Anyway, that's enough talking. I'll be at home being a cool friend. Feel free to come by and have that date. Nyeh heh heh."
And with that, he defies physics, walks on air, and goes home. Not sure how to explain it, but it was something like that.