Chapter 3 discusses special purpose diodes, including the basic operation and characteristics of ideal and practical diodes, as well as various types of diodes like zener, LED, photo, and schottky diodes. The zener diode is highlighted for its ability to conduct in reverse at a specific breakdown voltage, making it useful for voltage regulation. Additional diodes such as the tunnel diode and schottky diode are also covered, focusing on their unique properties and applications, along with troubleshooting techniques for maintaining proper functionality.