A messenger arrives to ask if Thorin would listen to another embassy since tidings had changed. Thorin thinks this means they have heard of the arrival of Dain. It turns out that they reveal the Arkentone. Thorin demands to know where they got it, calling them thieves. They say they are not and will gladly give back what is his for what is theirs. He demands again to know where they got it, and Bilbo says he gave it to them. Thorin grabs Bilbo in wrath and wishes for Gandalf, when Gandalf throws aside his hood and says that Thorin’s wish is granted (286–287).
Thorin expels Bilbo from the cave after he says he took his share and makes no further claim. Thorin says he will give Bilbo’s share in exchange for the Arkenstone, but secretly still hopes he may reclaim it without giving up any with the help of Dain. The elves and Bard claim they will come back tomorrow for their share and then the elf host will depart. Thorin sends Roäc to tell Dain of all that has happened (287–289).
The next morning it is reported that a host of dwarves are seen coming around the spur of the mountain. A description of the dwarves is given and there is a meeting between the dwarves and Bard. The goal of the dwarves, who have brought great supplies, is to make it easier to withstand a siege by occupying the mountain with Thorin, and possibly opening another gate so that the elf host would have to encircle the whole mountain to besiege it. Bard sends messengers to the gate to collect their gold, but they get arrows instead. The Elvenking is not as eager for battle as Bard is, who thinks they have the advantage above ground. He hopes for some reconciliation yet. But the dwarves attack first, and at this moment a darkness descends and Gandalf announces the arrival of the Goblins and a host of bats in the sky. He calls for quick council. This is the beginning of the Battle of Five Armies (Goblins/Wargs, Dwarves, Elves, and Men—and eventually Eagles) (289–292).
The Goblins have been joining forces ever since the Great Goblin was killed. And now they sweep down from the north where they had gathered. Since the Goblins are the foes of all, all other disputes are laid aside for the time. The plan is to lure the Goblins into the valley between the spurs of the mountain and hope the Goblins don’t come at them from over the mountain. The Elves take the southern spur while the men and dwarves take the Eastern spur. It is a terrible battle and Bilbo puts his ring on early in the affair. The elves attack first with arrows and spears. This is followed by the dwarves. Panic sets in on the Goblins, and as they turn to meet the new attack, the elves attack again (292–295).
Just when victory seems at hand, Goblins came down from the heights of the mountain. The tide turns and the elves and men and dwarves are in danger of being encircled on their spurs. At this point, Thorin and company emerge from the cave. In his rage, the Goblins and wargs fall back and Thorin calls the hosts to gather around him. They make great progress, but still they are too few, and soon, they are encircled. The prospects are hopeless. Bilbo has taken his stand with the Elvenking on the spur. But as Bilbo is despairing of life, he sees in a rent in the clouds the approach of the Eagles. He yells and screams and others take up the cry, but he is hit with a stone from the mountain and falls and is knocked unconscious (295–298).