The two main characters in the story are Corley and Lenehan. Corley is conceited and brags about everything. He boasts about the cigars and cigarettes that the maid steals from her owner. Lenehan acts as if he is Corley's sidekick. He takes part in his friends exploits, but at some points, feels as if he will get nothing out of their crime.
Situational irony occurs when what actually happens is the opposite of what is expected or appropriate. In the short story, Corley's father is a police officer. This is ironic because Corley is a criminal. The reader would expect Corley to be a good citizen because of his father's occupation, however he is the exact opposite. This is only one of the ironic situations in the story.
Another irony of "Two Gallants" is suggested by its title. A gallant is a man who is light, elegant, non-contrapuntal, and highly ornamented. The two men in this story are an ironic reversal of gallant behavior. Corley has thrown on his military suit and Lenehan is wearing his yachting cap with his raincoat slung over his shoulder. This is an example of verbal irony which occurs when a writer says one thing, such as the title, but really means something different.
These two different types of irony are a large part of "Two Gallants." James Joyce uses irony in the story to confuse the reader but also make a point. The irony used in this story are situational and verbal, given by the title and the occupation of Corley's father.