Shortly after the group begins their journey, they run into three monsterous trolls, who capture all 13 dwarves plus Bilbo. Gandalf tricks the trolls into staying outside until the sun rises, which turns them all to stone. They find many swords and all take their share.
The group makes their way to Rivendell, where they rest and meet Elrond, the great elf lord. They then journey to the Misty Mountains. During a snowstorm there, they find shelter in a cave. In this cave, a group of goblins captures them, but Gandalf and the dwarves escape and take a passage out of the mountains, forgetting Bilbo.
Bilbo wanders around the tunnels of the cave and finds a small, golden ring on the ground and takes it and puts it in his pocket. Soon, Bilbo stumbles upon the creature Gollum. Gollum wants to eat Bilbo, but to decide they have a riddle contest, in which Bilbo wins.
Gollum decides he wants to eat Bilbo anyways. Gollum takes off to go find his ring, the same one that Bilbo picked up earlier. The ring makes the wearer invisible, and Bilbo uses this to escape the goblins to get out of the cave. Once he finds the dwarves and Gandalf, they are chased by evil wolves known as Wargs, but are saved by eagles, and Beorn, a man who can change into a bear.
The company enters the forest of Mirkwood, where Gandalf abandons them, saying he needed to attend to some very urgent buisness. On the way through the forest, the dwarves are caught in a spider web, and Bilbo saves them with his magic ring and his sword. Shortly after, the dwarves stray from the path, and are lured into a home of the elves and are taken captive by them. Bilbo again uses his ring to save the dwarves. He slips them away from the elves and into barrells which he floats down the river. They reach Laketown, a human settlement on the water.
Laketown is by the Lonely Mountain, where Smaug resides with the dwarves's treasure. Bilbo sneaks into the mountain and talks to Smaug who reveals that he has a weakspot in his scales by his heart. Bilbo steals a treasure from Smaug, which makes him furious. Smaug leaves his cave, and burns down Laketown, but luckily Bard, an excellent archer, knew about Smaug's weak spot and killed him with his arrow.
The elves of Mirkwood and the men of Laketown demand a share of the treasure, and when Thorin, the dwarve lord, refuses, they trap the group of 14 in the mountain. A group of Wargs and Goblins comes and attacks. The men, elves, and dwarves are forced to fight alongside each other to defeat the Goblins and Wargs. Beorn and the Eagles, along with Gandalf, aid in their defeat.
Bilbo returns to Hobbiton, where he is no long accepted as an admirable hobbit. It doesn't matter to him anymore though. He much prefers the company of elves and wizards and enjoyed the comforts of his home.