In the morning, Bilbo awakens to find his house empty and his kitchen a mess. The twelve dwarves and the wizard have helped themselves to food and then left without washing up. Bilbo is mostly relieved—but also slightly disappointed—to realize that the group has set off without him. He eats breakfast, cleans up, and is sitting down to a second breakfast when Gandalf arrives and demands to know why Bilbo is not on his way to meet the dwarves. Thorin had left Bilbo a note inviting him on their adventure and offering a fourteenth share of the treasure for his services as a burglar, but Bilbo had not found it. Gandalf shoves the poor hobbit out the door so quickly that he does not even have a chance to grab a hat or a pocket handkerchief.

The dwarves tell Bilbo that he does not need a handkerchief, and they loan him a hood to use for a hat. They also give him a pony, then they all set out on the journey. For a few weeks, Bilbo rather enjoys himself. Their adventure seems to consist of riding a pony in the sun and listening to dwarves sing songs and tell stories. Meals are a bit too scarce for Bilbo’s liking, but otherwise it is quite nice.

The journey takes a turn for the worse one day when rain soaks the travelers and their stores. Gandalf disappears without saying where he is going, and Bilbo and the dwarves are feeling grumpy as they make camp. They are unable to start a fire, and their mood worsens. Suddenly Balin, the lookout, tells everyone he sees a light that looks like it might be a campfire. They are in dangerous lands, so they argue about whether it would be wise to investigate. Eventually the prospect of a fire and a warm meal entice them to brave the dangers and investigate—besides, they say, they did bring a burglar.

Together, the dwarves and Bilbo creep toward the light. When they get close, Thorin orders Bilbo to go alone to find out whose it is. If he gets in trouble, Bilbo is supposed to “hoot twice like a barn-owl and once like a screech-owl” so the dwarves will know to try and rescue him. Bilbo has no idea how to hoot “even once like any kind of owl,” but, like all hobbits, he can move quietly in the woods. He creeps right up next to the fire.

Three huge trolls are sitting next to the fire, complaining loudly that they have only mutton and not “manflesh” to eat. Bilbo knows that, as a burglar, he is supposed to pick their pockets or steal their meat—or simply kill them so he and his companions can spend the night by their fire. He does not know how to do these things, but he does not want to go back to the dwarves with nothing to show for his efforts. After spending quite some time gathering courage, he slips toward one of the trolls, William, and tries to steal his purse—but gets caught. William grabs Bilbo, and the three trolls immediately begin arguing about whether such a small creature is worth killing and eating. The argument quickly devolves into a brawl.

The trolls drop Bilbo, who crawls out of the way. By now the dwarves have heard the commotion, so they decide to come investigate. One by one, each of them creeps toward the fire. Balin arrives first, and the trolls pounce on him and tie him up in a bag. They step into the shadows and pounce on each of the other dwarves in turn. Thorin arrives last and best prepared. He fights the trolls, injuring two of them with a flaming log. Bilbo tries to trip one, but he is too weak; he just gets flung into a nearby bush. The trolls bag Thorin up with the other dwarves and sit back down by the fire, resuming their argument about how to cook and eat their captives.

Just as the trolls decide to roast the dwarves, Gandalf arrives. He stays hidden but joins the conversation, impersonating the voices of the trolls. He gets them to start arguing again, and he keeps them talking so long that eventually the sun comes up and turns them all to stone. Then Gandalf frees Bilbo and the dwarves, and they all go looking for the trolls’ cave. In it they find gold, a bit of food, and some weapons. Gandalf and Thorin each take a sword, and Bilbo takes a knife that is long enough to work as a sword for him. Gandalf comments that the blades are too good to be made by men and that he will soon find out who made them.