Bilbo wakes up rather late the morning after Gandalf’s visit. He is surprised—and a little relieved—to see that the dwarves have left without him. He is just sitting down to a quiet breakfast when Gandalf enters and rushes him off to the Green Dragon Inn, in Bywater, where Thorin and the rest of the dwarves have been waiting to begin their journey. As they head east on the main road, Bilbo sulks at having to leave without finishing his second breakfast or making proper preparations. It begins to rain. By the time dusk approaches, the whole company is tired, hungry, ready to camp, and annoyed at Gandalf’s mysterious disappearance earlier in the day.
Suddenly they see what looks like the light of a fire in the distance. They move closer to investigate it, and Bilbo is sent ahead in his first official task as burglar. As he approaches a clearing in the woods, Bilbo sees three huge trolls sitting around a fire, eating mutton. Bilbo tries to make off with one of the trolls’ money purses, but they hear the noise and grab him. Trolls will eat just about anything, but they are also short-tempered and dull-witted. They proceed to fight about how to interrogate Bilbo.
The commotion attracts the dwarves, who come to the clearing one at a time. The trolls stop fighting just long enough to hide in the trees and throw a sack over each approaching dwarf. Soon, they have everyone tied up except Bilbo, whom they’ve forgotten. The trolls decide to cook the dwarves immediately, but then a voice, which sounds like one of the trolls, starts an argument, and the three trolls start fighting again. This fighting goes on for quite some time until the trolls notice that it is almost dawn. The sun peeks over the horizon and the trolls all freeze—sunlight turns trolls to stone.
Gandalf then steps triumphantly into the clearing. He had been throwing his voice to mislead the dwarves and to keep the trolls arguing until morning. He and Bilbo release the dwarves, who are shaken but otherwise unharmed. Searching nearby, they find the trolls’ cave and a number of well-wrought weapons, which they take as payment for their pains.
As the company sets off the next morning, Gandalf explains that he has checked the road ahead up to the last safe stop along their way. This stop is Rivendell, a city of elves located just beyond the Edge of the Wild, near the foothills of the Misty Mountains, which the company will have to pass. As the company approaches Rivendell, a number of elves approach them and invite them back to eat and rest. During their stay, they meet Elrond, the great chief elf, who is “as strong as a warrior, as wise as a wizard, as venerable as a king of dwarves, and as kind as summer.”
Elrond can interpret the ancient runes, or markings, found on the company’s new weapons and on Thorin’s map of the mountain. The swords taken from the trolls, he tells them, are renowned goblin-killers from the great wars between the elves and the goblins. Gandalf’s sword is called Glamdring, and Thorin’s is named Orcrist. On Thorin’s map, Elrond is able to read moon-letters—writing visible only in the light of the moon in the proper phase—that describe how to find the secret entrance on the Lonely Mountain. Though they are puzzled by the message, the group is in high spirits when they depart from Rivendell. Everyone is well rested and prepared for the road ahead.