Here is a matching of the events of the short story “Charles” to the appropriate plot diagram moments:
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Exposition: The narrator, Laurie's mother, describes him becoming a big kid and going to school for the first time.
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Rising Action or Inciting Incident: Laurie comes home to tell his family in many details all about a naughty child in his school, named Charles.
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Climax: Laurie's mother attends the school meeting to confront the school about Charles.
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Falling Action: Laurie's mother notices that Charles is never mentioned or spoken about in the meeting.
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Resolution or Denouement: Charles is revealed to not be real; it is Laurie who is actually Charles.