The narrator suspends telling the story of Bilbo and the dwarves at the mountain and focuses on Smaug as the dragon flies toward Lake Town to wreak vengeance. The people of Lake Town see the dragon coming from a long way off (some think at first that his fire is the river running with gold) and prepare archers and many buckets of water to douse the coming flames. Their readiness is of little help, for Smaug flies over the town and lights every roof on fire. The men’s arrows bounce harmlessly off the dragon’s diamondlike hide. When most of the men have abandoned the city, one man, Bard, the captain of the archers, readies his last arrow. Suddenly, a thrush lands on his shoulder and speaks in a language he can understand. The bird tells Bard to watch for the dragon’s weak spot in the hollow of his left breast. Bard looks, sees the open patch, and lets fly his arrow. It plunges through the chink in the dragon’s armor and buries itself in his heart. The beast comes crashing down, destroying the rest of Lake Town as he dies. Bard manages to dive safely into the water and join the rest of his people, who are mourning the dead and their lost town. Some blame the dwarves for waking the dragon, but most assume that they too are dead. Then the lake men remember the gold in the Lonely Mountain, and they think eagerly of how the wealth could rebuild their town.
News of Smaug’s death spreads quickly. It reaches far and wide, bringing the Elvenking and an army of elves, who stop at Lake Town to lend aid. The humans and elves then gather together in a single army and march toward the Lonely Mountain. Most of them expect to find a massive treasure left unattended.
Meanwhile, the thrush returns to the company on the mountain. Finding that they cannot understand its speech, the thrush brings an old raven that can speak in the common tongue. This bird informs Bilbo and the dwarves of Smaug’s death, and they rejoice. However, their rejoicing is short-lived, as the raven goes on to describe the huge army of humans and elves marching toward them, as well as the suffering of Lake Town’s people, who surely deserve some share of the massive treasure in the mountain. Thorin regards the treasure as his inheritance and plans to fight for it, however, regardless of what the people of Lake Town have suffered.
Under Thorin’s orders, the company retreats to the mountain and fortifies it by building a formidable wall at the main gate. From there, they watch as Bard and representatives of the elves approach. Bard informs them that he killed Smaug and that Lake Town has been destroyed. He asks that the dwarves be generous in sharing the wealth of the mountain, since they have benefited so much at the expense of the humans. Thorin flatly refuses. He feels that he owes the humans nothing since the gold belonged to his people originally. Bard gives Thorin some time to reconsider, but Thorin will not change his position. The mountain is declared besieged: nothing and no one will be let in or out if elves and men can help it. Bilbo, for his part, would gladly share the treasure. He is entirely discouraged by the whole turn of affairs. However, no dwarf questions Thorin, and the hobbit has no say in the dwarves’ decision.
Bard, the only human hero in The Hobbit, is grim, courageous, and honorable. Bard’s descent from the people of Dale—who lived in peace with Thorin’s ancestors in happier times, before Smaug—allows him to hear the words of the thrush that communicates Bilbo’s message. Bard is brave enough to be the last man standing in the town and skilled enough to kill Smaug with a shot. Bard is kind and reasonable, presenting the demands of the men and the elves as politely as possible to Thorin and asking only for what is needed to rebuild Lake Town and help alleviate his people’s suffering.
After they find the treasure, the dwarves’ disturbing greed escalates to the extent that Thorin seems more like a villain than a hero by Chapter 15. We sense that poor Bilbo, as an ally of the dwarves, is stuck on the wrong side of the conflict. When the elf and human armies advance to propose that the treasure be shared, the narrator observes that Thorin’s lust for gold has been building ever since he entered the dragon’s lair. This lust has made Thorin and most of the other dwarves totally unreasonable. We are told that only Bombur, Fili, and Kili do not completely share Thorin’s stubbornness.