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The complication involving the four lovers actually reaches its climax and resolution at the end of Act III. Yet, because this play involves several stories or plots that are intertwined together, Shakespeare still needs two more acts to bring suitable and happy resolutions to each and every one of them.
At the beginning of Act IV, two more conflicts are still present: Bottom still has the head of an ass, and Titania is still in love with Bottom.
However, quickly after Titania and Bottom go to sleep, Oberon and Puck arrive to resolve both of these difficulties. Oberon explains to Puck (and to the audience) how he had obtained the Indian boy from Titania (lines 56-58). Now that Oberon has the boy, he no longer wishes to see his queen acting so foolishly. He even tells Puck that he now has “pity” for her (line 44). So, Oberon is ready to remove the effects of the love potion from Titania. And he does so (at line 67).
Oberon also orders Puck to remove the ass’ head from Bottom. Further, Oberon will cast a magic spell on Bottom so that Bottom will think that all of the night’s activities were just a dream (lines 63-66). This is the same sort of spell that Oberon had also cast on the four lovers.
Shakespeare, in these lines, provokes the imaginations of his audience. Dreams are often real, the lines imply; but all of us are cast under a magic spell so that we do not realize it when we wake up. Shakespeare’s notion is both quaint and charming.
After Titania awakens, she and Oberon no longer quarrel. As Oberon explains to Titania, they can now go about their business of performing benevolent magic for mankind:
Now thou and I are new in amity,
And will tomorrow midnight solemnly
Dance in Duke Theseus’ house, triumphantly, And bless it to all fair prosperity. (84-87)
The lines are a double-foreshadowing. The play will end with a fairy dance, which is their magical way of blessing the bride and groom; and in their future years Duke Theseus and his wife Hippolyta will have a “fair prosperity” or a beautiful future together.
As the morning sun is about to appear, the fairies exit the stage.