Nick explains that Gatsby is actually James Gatz from North Dakota (midwest) who left home at a young age to seek his fortune. Gatsby changed his name at seventeen when he met Dan Cody, a self-made millionaire.
Tom is invited to one of Gatsby's parties and arrives with Daisy. Daisy is offended by West Egg and the debauchery of the party, while Tom gets the names and addresses of pretty women.
Gatsby wants Daisy to say that she never loved Tom so they can "wipe out" her marriage and start again.