A better sense of direction than the first two chapters.  Actually, the first two should have been chapter 1, and this should have been chapter 2.
I like the way you used Fate in this and I'm hoping you'll find a way to keep the Fate/Harry interaction going on for a few more chapters. 
Good luck with chapter 4!
Author's response
I generally break chapters up by scene for the most part.  For that matter, originally, I had no plans to do anything like Ch2, it was either going to be the first or third option.  Then I decided to have some fun with this.  I generally write fairly bizarre stories in all honesty.  I like taking a little piece of canon or fanon and stretching it like taffy.
Fate will probably stick around, right now I am debating sticking her into either ch 4 or a later chapter.