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The idea of the 'dragon-spell' is that an individual may be susceptible to the lure of fabulous riches, and upon seeing a magnificent hoard, that person may become increasingly greedy, protective, or fierce. The dwarves in The Hobbit have a natural passion for gold, silver, and jewels, and when Thorin's company first ventures into Smaug's lair, the dwarves immediately start to feel the lure of the treasure:
"The mere fleeting glimpses of treasure which they had caught as they went along had rekindled all the fire of their dwarvish hearts; and when the heart of a dwarf, even the most respectable, is wakened by gold and by jewels, he grows suddenly bold, and he may become fierce" (214).
The dwarves are more susceptible to the "bewitchment of the hoard" than Bilbo, because it is part of their nature to love and admire riches from the earth. Most of Thorin's company hail from the House of Durin, a long famous line of miners, craftsmen, and kings; gold and jewels are part of their heritage. Unfortunately, Thorin feels this longing keenly, and the 'dragon-spell' affects his better judgment at the end of the story when bargaining for the Arkenstone:
"And already, so strong was the bewilderment of the treasure upon him, he was pondering whether by the help of Dain he might not recapture the Arkenstone and withhold the share of the reward" (248).
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