Bilbo and company advance upon the Misty Mountains. Thanks to Elrond’s and Gandalf’s advice, they are able to find a good pass over the mountain range among the many dead-end trails and drop-offs. Still, the climb is long and treacherous. A violent thunderstorm breaks suddenly, forcing them to find shelter. Luckily, two of the dwarves (Fili and Kili) find a cave in a side of the mountain. They bring in the ponies and make camp for the night.
In the middle of the night, Bilbo wakes with a start, just in time to see the ponies get dragged into an enormous crack that has opened in the cave wall. He yells, and out of the crack jump dozens of goblins, who tie up and carry off each member of the company except Gandalf, who was forewarned by Bilbo’s yell.
The goblins carry the dwarves and the hobbit down into the mountain to a huge chamber where the Great Goblin sits. He demands to know what the travelers are doing in his mountain. Thorin tries to explain about the storm, but one of the goblins brings forth the sword that Thorin took from the trolls, which he was carrying when captured. This sword, Orcrist, the goblin-cleaver, is well-known among the goblins.
The goblins go into a rage and the Great Goblin lunges at Thorin to eat him. Suddenly, the torches lighting the cavern go out and the great fire in the middle of the chamber throws its sparks onto the goblins. In the darkness and confusion, a great sword flashes and strikes down the Great Goblin. Then a voice guides the captives out of the cavern. It is Gandalf, who leads the dwarves through the passages and deeper into the mountain. The goblins follow quickly after them, and one of the goblins catches up to the dwarf Dori, who has been carrying Bilbo on his back. Bilbo falls off, strikes his head on the ground, and loses consciousness.
It’s got to ask uss a question, my preciouss, yes, yess, yess. Jusst one more question to guess, yes, yess.
When Bilbo regains consciousness, he can see nothing in the darkness. Feeling around on the floor, he happens to come across a ring, which he puts in his pocket. He has no idea where the rest of the company is, or in which direction the exit lies. Picking the path he feels he had been traveling with the dwarves, he soon comes across an underground lake. There, he discovers a strange creature named Gollum. When Gollum sees Bilbo prowling around, obviously lost, he is interested and a bit hungry, so he approaches the hobbit. Bilbo brandishes his sword when he hears Gollum’s hissing voice.
Gollum does not wish to contend with the sword, so he proposes a riddle game. If Gollum’s riddle stumps Bilbo, he will eat Bilbo, but if Bilbo’s stumps Gollum, Gollum will show Bilbo the way out of the mountain. Bilbo has no choice but to agree, and they begin asking each other riddles. In the end, Bilbo wins through a bit of trickery. Referring to the ring he had found, he asks, “What have I got in my pocket?” and Gollum cannot guess the right answer. Gollum, however, does not intend to let his meal get away so easily. He goes to his island in the middle of the lake to get his “precious,” a golden ring that makes its wearer invisible—the very ring that Bilbo had found.