This hobbit was a very well-to-do hobbit, and his name was Baggins. The Bagginses had lived in the neighbourhood of The Hill for time out of mind, and people considered them very respectable, not only because most of them were rich, but also because they never had any adventures or did anything unexpected.

Here, the narrator introduces Bilbo through the environment in which he grew up: Hobbiton—more specifically, The Hill—a place of safety, comfort, and sameness. These characteristics frame how Bilbo defines his life, and at the story’s start, he has no interest in ever stepping outside that frame. Timid as Bilbo seems, his disinterest in glory serves as one of the key qualities that eventually make him a true hero.

Then he took out his morning letters, and began to read, pretending to take no more notice of the old man. He had decided that he was not quite his sort, and wanted him to go away. But the old man did not move. He stood leaning on his stick and gazing at the hobbit without saying anything, till Bilbo got quite uncomfortable and even a little cross.

The narrator explains how Bilbo tries to get Gandalf to leave him alone by simply ignoring him. This feeble attempt at problem-solving shows how far Bilbo has yet to go as a heroic figure. Even when uncomfortable or actively upset, Bilbo refuses to confront his problem head-on and hopes the issue will just go away. The dangers on his impending journey to the Lonely Mountain will force Bilbo to take action on his own behalf.

Then Mr. Baggins turned the handle and went in. The Took side had won. He suddenly felt he would go without bed and breakfast to be thought fierce.

The narrator explains how, upon overhearing the dwarves doubting his bravery, Bilbo desires to prove them wrong—and attributes such behavior to his mother’s side, the Took family. Bilbo’s decision-making frequently comes down to a battle between his Baggins and Took sides—the Baggins side tending toward safety, the Took side tending toward boldness. As Bilbo listens to his Took side more and more, readers see more of an adventurer within him than had initially appeared.

Off Bilbo had to go, before he could explain that he could not hoot even once like any kind of owl any more than fly like a bat. But at any rate hobbits can move quietly in woods, absolutely quietly. They take a pride in it, and Bilbo had sniffed more than once at what he called “all this dwarvish racket,” as they went along, though I don’t suppose you or I would have noticed anything at all on a windy night.

The narrator describes how, assigned by the dwarves to scout ahead in the woods, Bilbo grumbles and protests but already finds he possesses skills unique to him that are helpful. Bilbo has always taken for granted his ability to navigate the woods quietly, and even now he doesn’t seem to recognize the specialness of his skill. However, these small moments of confidence serve as the building blocks of his developing heroism.

He knew, of course, that the riddle-game was sacred and of immense antiquity, and even wicked creatures were afraid to cheat when they played at it. But he felt he could not trust this slimy thing to keep any promise at a pinch.

Bilbo, playing a game of riddles with the frightening Gollum, begins to suspect that Gollum doesn’t abide by any moral code whatsoever. This suspicion reveals a key aspect of Bilbo’s personality: He may be inexperienced and hesitant, but he is not naive. In this instance and others, his gut is spot-on about other characters’ motivations, and his practical but sharp mind helps him think his way through danger.

It is a fact that Bilbo’s reputation went up a very great deal with the dwarves after this. If they had still doubted that he was really a first-class burglar, in spite of Gandalf’s words, they doubted no longer. Balin was the most puzzled of all; but everyone said it was a very clever bit of work. Indeed Bilbo was so pleased with their praise that he just chuckled inside and said nothing whatever about the ring.

The narrator explains why the dwarves changed their minds about Bilbo’s burgling abilities. After Bilbo sneaks up on the dwarves and tells them of his sneaky escape from Gollum, pretending he didn’t have a ring of invisibility helping him, the dwarves seem awestruck. Bilbo’s omission about the ring shows his savvy but also a shade of moral gray. The hobbit doesn’t outright lie to his comrades, so his secret feels innocuous, but bringing a mysterious magical item from a horrid creature’s cave into the ranks of comrades carries real potential for harm.

It was lucky that he had come to his senses in time. Soon he would not have been able to move at all. As it was, he had a desperate fight before he got free. He beat the creature off with his hands—it was trying to poison him to keep him quiet, as small spiders do to flies—until he remembered his sword and drew it out.

The narrator explains how Bilbo single-handedly fights and vanquishes a monstrous spider. This battle represents a turning point for Bilbo, and he himself acknowledges he feels different and more powerful afterward. Bilbo had never before been truly tested; now, with his life on the line and no one, not even Gandalf, to save him, he claims victory all on his own.

For some time Bilbo sat and thought about this water-gate, and wondered if it could be used for the escape of his friends, and at last he had the desperate beginnings of a plan.

When elves capture all the dwarves, Bilbo, as the only one not imprisoned, is forced to rise to the occasion and plan an escape. Before, when fighting the spider, Bilbo had only his own life to save. Now, the fate of the entire expedition rests in his hands, and though he wracks his brain for some time, he formulates a plan that ultimately saves the day. Bilbo’s inner heroism becomes even more fully realized.

Then Bilbo, not without a shudder, not without a glance of longing, handed the marvelous stone to Bard, and he held it in his hand, as though dazed.

The narrator details the moment Bilbo hands over the Arkenstone. Bilbo offers Bard one of Thorin’s most prized possessions to use as a bargaining chip. This exchange represents one of Bilbo’s boldest moments, risking Thorin’s fearsome wrath at the betrayal. However, Bilbo knows that war between Thorin and his enemies must be prevented to save a good many lives, and so he takes the situation into his own hands—a far cry from waiting impatiently for Gandalf to leave at the story’s start.

It is true that for ever after he remained an elf-friend, and had the honour of dwarves, wizards, and all such folk as ever passed that way; but he was no longer quite respectable. He was in fact held by all the hobbits of the neighbourhood to be “queer” except by his nephews and nieces on the Took side, but even they were not encouraged in their friendship by their elders. I am sorry to say he did not mind.

Here, the narrator recounts how, when Bilbo returns from his adventure, he finds himself ostracized for his exploits, separated from his society forever by his brush with the unknown. The Bilbo at the story’s beginning would likely fret over this, but now, with a fuller sense of the world and a firmer sense of himself, Bilbo couldn’t care less, content with his individual worth and the true friends he earned on his journey.