The movie’s triumph is that it allows spirit, not some thinking filmmaker, to be in control, and a (still life) portrait of spirit in motion is what results. The same with Renaldo’s blue hat, symbol of performance (“who’s Dylan?” “he’s the one with the hat”), moving through the scenes (so nice the dissolve from Phil Ochs putting it on his head – “the hat, Bobbie!” – to hat on table in Yetnikoff’s office, one feels the camera following the hat and understands therefore how we got here), sometimes the flower’s on the hat.–” (Williams, p. 103)
Gerdes Folk City, New York.
On 23 October 1975, Bob Dylan and the newly-formed Rolling Thunder Revue previewed their show at Mike Porco’s 61st birthday party at Gerdes Folk City before beginning their tour formally on 30 October 1975 in Plymouth.
Amongst the people present at Gerdes that night was Phil Ochs. The film crew were recording for what was to become the movie Renaldo & Clara and the footage that remained in the movie was the last known footage of Phil Ochs.
As detailed in the biography of Ochs, Death of A Rebel (Marc Eliot, 1979, p. 173-174), just as Phil Ochs was beginning his set, he called to Bob Dylan and borrowed his ‘thunderclap’ hat. He wore it for the performance and into the evening, before Dylan sent David Blue to retrieve it at approximately 4 am.
In his book, Bob Dylan Performing Artist 1974-1986 The Middle Years, Paul Williams wrote about the moment:

Sources : www.edlis.org/hat