Somehow [after] the killing of this giant spider . . . [h]e felt a different person, and much fiercer and bolder in spite of an empty stomach, as he wiped his sword on the grass and put it back into its sheath.
Darkness falls upon Bilbo and the dwarves as they enter the bleak forest of Mirkwood. Strange eyes peer out at them from the trees. Soon, the group cannot tell night from day. Everyone can think only of getting out of the stuffy, ominous woods, but there seems to be no end in sight. After a few days, they come to a stream that Beorn had warned them not to touch. They cross using a boat already moored there, but a dwarf, Bombur, falls in and is put into a sleep that lasts for days. The rest of the party is forced to carry him. Hungry, tired, and scared, they begin to despair.
One night, they see a flicker of lights in the trees and, ignoring the warnings of Beorn and Gandalf, they leave the path and move toward the lights. They see elves sitting in a clearing around a fire, feasting and singing. However, the moment they burst into the clearing, the lights are snuffed out, and the dwarves and Bilbo can hardly find one another. The same thing happens twice more. On the last occasion, everyone becomes separated, unable to find one another in the darkness. Soon, Bilbo stops hearing voices and, exhausted, leans against a tree to sleep.
When Bilbo awakens, his legs are bound with sticky thread and an enormous spider is advancing toward him. Whipping out his sword, he slashes his legs free and slays the spider. Flush with victory, he gives his sword a name: Sting. He then goes in search of the dwarves. To his horror, he finds them all hanging from a tree, tied up in the webs of the many spiders that sit atop the branches. Bilbo whips a few stones at the spiders and then leads them away from the dwarves by yelling. Fortunately, he is wearing the ring all the while, so the spiders cannot find him.
Having led the spiders away, Bilbo slips back and cuts the dwarves free. But the spiders soon return, and the dwarves, weak from the spiders’ poison, can hardly fight them off, even with the aid of the invisible Bilbo. Just when the situation looks completely hopeless, the spiders suddenly retreat, and the company realizes that they themselves have retreated into one of the clearings used by elves. There, they rest to ponder their next course of action. A moment later, they realize with horror that Thorin is missing.
Unbeknownst to the others, Thorin was taken prisoner by the elves when he stepped into the clearing before the spider attack. The elves are wood elves, who are good but suspicious of strangers. The Elvenking questions Thorin about his journey. When Thorin refuses to say where the company is going, the elves throw him in the dungeon, but they feed him and are not cruel.
Soon after Bilbo and the rest of the dwarves escape the spiders, they are surrounded by a company of wood elves and brought blindfolded to the Elvenking’s halls. Bilbo, still wearing his ring, remains undetected. The other dwarves are brought before the king and questioned. Like Thorin, they refuse to reveal their plan to reclaim the treasure from Smaug for fear that the elves will demand a share. Also like Thorin, the dwarves are thrown into the dungeon. Meanwhile, Bilbo, having followed the captured dwarves, walks invisibly through the halls, whispering to the dwarves in their cells and plotting an escape.