The party enters the forest and soon come to hate its darkness and eeriness, from the eyes that watch them at night to the cobwebs they see off the path. Days stretch on with Bilbo being hungry and thirsty as they attempt to conserve food and drink. After many days they come to a moving stream about 12 yards across. As they wonder how to get across, Bilbo spies a boat on the far shore. Fili throws a rope and snags the boat, and they all begin to cross a few at a time.
As the last boat load is getting across, a stag springs out of the wood, knocking over several dwarves and Bombur into the water. Even though Thorin managed to shoot the deer with his bow, the commotion of Bombur and the ensuing losing of the boat meant they would be unable to retrieve the deer from the other side. The magical water they had been warned about puts Bombur to sleep, and the other dwarves waste their arrows on some other deer that appear in the distance before Thorin can stop them.
Bombur now had to be carried and no one is very happy. While changes in the forest should have encouraged them that they were nearing the eastern edge, their burden of carrying Bombur and their quickly diminishing supplies and Bilbo’s misunderstanding of the lay of the land when they send him up a tree to scout their progress, leave them all dejected instead.
When the last of their food is gone and a rain that they can’t quite enjoy is taunting them, Bombur suddenly awakes, but he can’t remember anything since they left Bilbo’s in May. Having not eaten in several days as he has been asleep, Bombur finally gives up in despair, sitting and refusing to go on. At this point lights appear off the path. After much arguing, they all decide to go investigate—despite the warnings to not leave the path. As they step into the circle of lights, the lights vanish, and the party finds themselves hopelessly lost for sometime in the dark, stumbling over one another until they can account for everyone. By this time they have lost all sense of direction and are indeed hopelessly lost.
But soon lights reappear in the distance, and they agree that Bilbo should go first into the circle this time. He plans on putting on his ring, but before he can, they shove him in the circle and the lights go out again as before. Much later in the evening, the lights reappear, and this time Thorin is the first to step in the ring. Before he does so, they see a woodland king in a scene much like Bombur described earlier from one of his dreams. But once again all the lights go out, and this time Bilbo gets completely separated from the rest of the party.
As he is dozing against a tree, he feels a spider touch him and realizes that he is almost tied up. He manages to draw his sword, cut himself loose, and kill the spider. Then he immediately falls back asleep in exhaustion. When day comes he sets off in the direction he thinks he last heard the dwarves. He comes upon a ring of spiders and finds the dwarves all strung and wrapped up, hanging from a tree limb.
Bilbo begins throwing stones at the spiders and knocking them off the limbs. And then a game of hide and seek begins with Bilbo using the ring to remain invisible. Despite this, he is almost caught a couple of times, but manages to lead the spiders away from the dwarves through taunting songs and insults. He then sneaks back for a rescue mission, cutting the dwarves free one at a time and hauling them up on the branch.
The spiders, however, return in the middle of this rescue mission, and a long battle ensues with Bilbo doing most of the fighting as the dwarves are half-poisoned and worn out from their capture. Bilbo finally makes the decision to put on the ring—giving away his secret to the dwarves—in hopes of drawing the spiders away again to give everyone a chance to escape.
Finally the spiders begin to give up and the party finds themselves in one of the rings where the elves were having their feast. Here the dwarves demand and receive the story of the ring and Gollum. They all begin to fall asleep when Dwalin realizes that Thorin is not among them. We learn that Thorin had been captured by the wood elves when he stepped into the ring.
Then we get a description of these people and their home on the edge of Mirkwood. And it is here that Thorin is taken, into the dungeons of the king. When Thorin is interrogated, he refuses say anything except that he and his people were starving which is why they came into the circle. But the king doesn’t believe him and orders him held captive. Thankfully, they also feed him, and at this point Thorin wonders what has become of his friends.