Complex sentence: Don Quixote takes the friars to be enchanters who hold the lady captive; knocks a friar from his horse; and is immediately challenged by an armed Basque traveling with the company.
Split into simpler sentences: Don Quixote takes the friars to be enchanters who hold the lady captive. He knocks a friar from his horse, and is immediately challenged by an armed Basque traveling with the company.