Bilbo awakes to total darkness, aloneness, and miserableness, especially after realizing that while he has a pipe and tobacco, he has no matches. This made him miserable despite realizing that he didn’t need to light a match or produce the smell of tobacco in the goblin tunnels. He also found a ring on the floor of the tunnel and put it in his pocket. And he remembered his sword, which comforted him. And so he set off down the tunnel (79–80).
We are reminded how Hobbits are not quite like people, and how, while Bilbo was in a bad scrape, he was not as bad off as a person would have been in the same situation. So Bilbo went on and on, growing tireder and more tired until he stepped into cold water, and decided he had reached an underground lake of some sort (80–82).
We are introduced to Gollum, a slimy creature who lived on an island in the lake and ate fish and goblins, and as Bilbo sat at the edge of the lake, Gollum was watching him. Curious he sets off across the lake in his boat and decides to talk to Bilbo instead of eat him—as he’s not very hungry at the moment. He scares Bilbo half to death, which causes Bilbo to draw his sword, and thus begins a strange relationship between Gollum and hobbits which will last for decades, and it also began a game of riddles (84).
The riddle game commences with a back and forth of easy and hard riddles and sheer luck on Bilbo’s part more than once. But the most lucky of all was his talking to himself at the end about what was in his pocket. Gollum complained of the unfairness of it all; Bilbo realizing what had happened, stuck to his question but gave Gollum three guesses. He, of course, got all three wrong, so Bilbo demanded Gollum lead him out of the cave. Since Bilbo didn’t trust Gollum, he also drew his sword (84–90).
Before Gollum would lead him out, he said he had to retrieve something from his island, which we learn is a magic ring that makes him invisible. Not finding it, he assumes that Bilbo has it in his pocket—that he’s stolen it. They begin to argue about what is in Bilbo’s pocket vs. what Gollum is looking for. Neither will tell, and Bilbo begins to fear for his life and takes off back up the tunnel with Gollum hot on his heals. While Bilbo is running he puts his hand in his pocket and slips the ring on, stumbles, falls, and assumes Gollum will pounce on him. But Gollum runs right by (91–94).
Bilbo follows quietly, but soon Gollum sits, begins to weep, and talks to himself. In these ramblings, Bilbo learns that Gollum has lost a magic ring that makes one invisible. Now Bilbo realizes what he has and why Gollum didn’t see him when he fell. Gollum resumes his search for Bilbo to the “back door,” and Bilbo follows behind (94–96).
Bilbo has a brief thought of stabbing Gollum to get past him as Gollum sits in the doorway to the passage out, but pity pulls him up short. And in a desperate moment, he leaps over Gollum who grabs in the dark but misses. Now Bilbo speeds up the passage way until he comes to a goblin-guarded door. Almost too late, Bilbo realizes that the ring has slipped off his finger. He has been seen. As the goblins rush him, he manages to get the ring back on and escape capture. Hiding behind a barrel, darting between legs, and managing to get to the partially open door, Bilbo becomes stuck. As the goblins see his shadow from the outside sun, he pops all the buttons off his coat and escapes (97–100).