how do the ssquire and dr.livesey react to mr.dance's account of the icident at the inn?

Both the Squire and Dr. Livesey were entranced by Mr. Dance's story. They were quite excited like it was an adventure out of a book or journal,

Mr. Dance "told his story like a lesson; and you should have seen how the two gentlemen leaned forward and looked at each other, and forgot to smoke in their surprise and interest. When they heard how my mother went back to the inn, Dr. Livesey fairly slapped his thigh, and the squire cried "Bravo!"

This was truly some sort of harbinger to adventure or at least a little excitement around the county.