Berachos, chapter seven, mishnah 5. The mishnah before us contains two separate halachos: the law of joining two groups together for a single zimun, and the law of the berachah over wine that has not been diluted with water.
"Shnei chavuros she'hayu ochlos b'bayis echad" - two groups that were eating in one house:
Two separate groups dining in one house - can they recite the zimun together, or must each one recite the zimun on its own? Here the mishnah distinguishes between two situations:
"Bizman she'miktzasan ro'in eilu es eilu - harei eilu mitztarfin l'zimun" - there is no need for all the members of the groups to see one another; it is enough that only some of them see each other, and through this the two groups join together to recite the berachah as one.
"U'vizman she'lav - eilu mezamnin l'atzman v'eilu mezamnin l'atzman" - when there is no line of sight at all between the groups, each group recites the zimun separately on its own.
The Gemara adds that if the two groups share one attendant who serves them both, even though he is not eating with them, the very fact that he serves both groups is enough to join them together for a single zimun.
"Ein mevarchin al ha'yayin ad she'yiten l'socho mayim" - one does not recite a berachah over wine until water is added to it:
From here the mishnah moves on to a halachah in an entirely different area: "Ein mevarchin al ha'yayin ad she'yiten l'socho mayim - divrei Rabbi Eliezer" - one does not recite a berachah over wine until water is added to it, the words of Rabbi Eliezer. In the time of the mishnah, wine was very strong and required mixing and diluting with water. Rabbi Eliezer therefore holds that as long as water has not been added to it, its berachah is not "borei peri ha'gafen" but "borei peri ha'etz".
"V'chachamim omrim: mevarchin" - and the Sages say that one does recite the berachah. In the opinion of the Sages, one may recite "borei peri ha'gafen" even over wine that has not been properly diluted.
The Sages do agree with Rabbi Eliezer, however, with regard to the cup used for Birkas HaMazon: when one comes to recite Birkas HaMazon over a cup, choice wine that is fitting for the purpose is required, and therefore even they agree that it may not be used for Birkas HaMazon until water is added to it.
In summary: in this mishnah we learned two halachos. The first - two groups eating in one house join together for a zimun when some of them see one another, and likewise by means of a single attendant who serves them both. The second - the dispute between Rabbi Eliezer and the Sages regarding the berachah over wine that has not been diluted with water, in which the Sages agree with Rabbi Eliezer that the cup of Birkas HaMazon requires choice wine that has been diluted with water.