Bilbo and the dwarves think they might reach the Lonely Mountain before the very next Durin’s Day, but Gandalf is not so optimistic. He knows that the journey will be dangerous and slow. As the little group climbs into the Misty Mountains, Bilbo once again finds himself pining after his hobbit hole. He thinks about the hobbits of his neighborhood and the happy time they must be spending, blackberry picking and harvesting, while he is traveling farther and farther from home in the cheerless mountains. The dwarves are equally gloomy.

When a thunderstorm begins, everyone’s mood grows gloomier still. Stone giants come out and hurl rocks at one another in the hills. Everyone is terrified that they will get caught in this battle, so Thorin sends Fili and Kili, the youngest of the dwarves, to look for shelter. They soon come back with the news that they have found a cave large enough to accommodate all of them and all of their ponies. Gandalf asks if it is uninhabited, and Fili and Kili assure him that all is well. Everyone packs up and moves to the cave, which is indeed dry and cozy. Gandalf lights his wand and searches the room for any sign of danger, but the cave seems empty. The travelers unload the ponies and spread their clothes out to dry. Then they lie down to smoke before sleeping.

That night, for the first time, Bilbo is truly useful to the group. He has trouble sleeping, and he dreams that a crack opens at the back of the cave. He awakens to see that his dream is true, and he cries out loudly. At that moment, several goblins appear and snatch up the dwarves and the hobbit. Bilbo’s shout came just soon enough to alert Gandalf, who disappears in a flash, killing several goblins in the process. Nobody knows where he has gone. The goblins seize Bilbo and the dwarves and run away fast, sealing the hole in the wall behind them. They laugh and sing horrible songs as they carry their victims toward a fire in the middle of the mountain, where the Great Goblin awaits them. It seems that the goblins plan on enslaving them in their tunnels.

The goblins lead the travelers down into an enormous cave that acts as their throne room. The Great Goblin surveys the travelers and accuses them of trying to steal from his people. Thorin speaks for the group and claims that they were only taking shelter as they passed through. The goblins call him a liar, especially when they see his sword, a blade that is renowned for having killed hundreds of goblins. The Great Goblin proclaims Bilbo and the dwarves “murderers and elf-friends.” He tells his followers to let the travelers die in deep holes.

Before the goblins can carry out their leader’s orders, all of the lights in the cave blink out. The goblins panic, and a sword appears in the darkness, killing the Great Goblin before anyone else can react. The goblin soldiers run away screaming, and then Bilbo and the dwarves hear Gandalf’s voice: “Follow me quick!” Bilbo has trouble keeping up as Gandalf leads them deeper into the mountain. Dori, the dwarf nearest to Bilbo, sees him struggling and hoists him onto his shoulders.

When it is finally safe to stop and evaluate their situation, Gandalf does a headcount and finds that everyone is present. However, they have lost their ponies and food, and they have no clear idea of their location. They rush off, knowing that the goblins will not be far behind. The dwarves take turns carrying Bilbo, who cannot move as quickly as the rest of them can. At one point, Gandalf and Thorin stop to kill some goblins who catch up with them. Afterward, the goblins take off their shoes, put out their lights, and chase the travelers silently. Dori, who is at the back of the line of dwarves and carrying Bilbo, gets grabbed from behind. Bilbo falls off Dori’s back, bumps his head on a rock, and passes out.