By employing a quantum hydrodynamic (QHD) model with appropriate boundary conditions, the nonlinear self-interaction of an electrostatic surface wave on otherwise homogeneous semibounded plasma with degeneracy effects is investigated. It has been found that a part of the second harmonic generated through self-interaction does not have a true surface wave feature but propagates obliquely away from the plasma–vacuum interface into the bulk of the plasma. Such a situation is obtained in laser–plasma interaction during surface etching, plasma processing, and so on. In this article, we study the harmonics generation mechanism, associated Lagrangian chaos, and harmonic conversation rate when an intense laser is incident on an unmagnetized plasma. The dense plasma displays quantum diffraction effects and other quantum statistical effects. We made use of perturbative analysis for the field quantities. The findings will help workers dealing with laser–plasma interaction so as to enhance the tendency of harmonic generation and energy localization.