“There lies all that is left of Dale,” said Balin. “The mountain’s sides were green with woods and all the sheltered valley rich and pleasant in the days when the bells rang in that town.”

As the party approaches its mountain destination, the dwarf Balin points out Smaug’s destructive wake to Bilbo. Before readers actually meet Smaug, the dragon is slowly introduced through others’ fear and through the damage he has caused. The more Bilbo hears about Smaug secondhand, the more the dragon’s unseen menace grows.

A sound, too, began to throb in his ears, a sort of bubbling like the noise of a large pot galloping on the fire, mixed with a rumble as of a gigantic tom-cat purring. This grew to the unmistakable gurgling noise of some vast animal snoring in its sleep down there in the red glow in front of him. It was at this point that Bilbo stopped. Going on from there was the bravest thing he ever did.

The narrator explains the moment Bilbo enters the inner cave of Smaug’s mountain and realizes he and the dragon are about to be face-to-face. Bilbo knows Smaug must be nearby because Smaug’s presence literally suffuses the atmosphere of the cave. Bilbo feels Smaug even before he sees him due to Smaug’s enormous size and power. Smaug’s breathing rumbles in Bilbo’s chest, and his fire breath heats the thick air.

Bilbo had heard tell and sing of dragon-hoards before, but the splendour, the lust, the glory of such treasure had never yet come home to him. His heart was filled and pierced with enchantment and with the desire of dwarves; and he gazed motionless, almost forgetting the frightful guardian[.]

Here, the narrator relates Bilbo’s response when he first lays eyes on Smaug’s hoard and nearly forgets his fear, so wondrous are the riches. This moment, in which Smaug’s hoard appears nearly as awe-inspiring as the dragon himself, establishes the mountain of gold as an extension of Smaug’s character. Taken together, Smaug and his hoard paint a full picture of greed: the dragon showing greed’s monstrousness, the hoard showing greed’s lustful allure.

“I did not come for presents. I only wished to have a look at you and see if you were truly as great as tales say. I did not believe them.” “Do you now?” said the dragon somewhat flattered, even though he did not believe a word of it.

After Smaug questions Bilbo’s motivations for entering the cave, Bilbo attempts to flatter the dragon, and though Smaug’s mind remains razor-sharp, he is heavily swayed by vanity. Bilbo, although terrified, senses Smaug’s great narcissism and outwits the dragon. Smaug’s susceptibility to flattery speaks to the blinding effect of wealth and power, to which even the most fearsome of creatures fall prey.

The dragon swooped once more lower than ever, and as he turned and dived down his belly glittered white with sparkling fires of gems in the moon—but not in one place. The great bow twanged.

Here, the narrator describes the moment Smaug meets his doom. Based on a tip from Bilbo, the Lake Town warrior Bard fires his arrow straight for Smaug’s weak spot, the place on his belly not protected by scales, and fells the dragon. Smaug’s death, like Bilbo’s journey, illustrates the unexpected effectiveness of the small against the powerful. Even a flying, fire-breathing dragon can be brought down by a lone archer with the courage to string an arrow and the cleverness to think carefully about where to shoot.