Answer:
What happens in the third stanza is that the poet sees the waves and watches the daffodils with awe.
Step-by-step explanation:
The poet describes the natural wonders his eyes have come to see in this poem, at the sky the land and the sea, stanza three starts referring to the daffodils that were mentioned in the second stanza, and then moves forward to the description of the waves and the inexplicable happiness he feels to be in the presence of such a spectacle.