The group of adventurers begin to walk the path through the forest, Mirkwood. It is a dark dense forest in which few fragments of light manage to shine through. There is nothing to eat besides the food they carry on their backs and water is just as scarce. They feel very alone and depressed from the darkness and unending pathway, it seems as if they will never leave the forest.

They come upon a stream of black water running across the path, but they have been warned by Beorn not to drink or touch the water, because it is enchanted. Bilbo spots a boat on the other side of the water, about twelve feet away from them; it is their only chance to cross the water. Thorin has Fili use a rope with an iron hook to grab the boat and haul it back to their side of the water. It takes him a few tries, but he manages to grab it, then he throws another rope to the other side and anchors it in some branches. This way they can use the rope to pull the boat back and forth to ferry them to safety. Everything goes well until it is Bombur's turn, a deer jumps across the water just as he is boarding the boat, which causes him to fall into the water. He is under the spell of the water, which puts him to sleep for days, so he has to be carried by the others in the party.

The food has run out and the dwarves and Bilbo are very hungry. One night Balin sees some lights in the forest, which makes them think that maybe the beings under the lights have food. To go to the lights means they will have to leave the path, which is what Beorn and Gandalf told them never to do, but their hunger wins out and they leave the path. As soon as they show themselves to the elves under the lights, the lights go out leaving them alone in the pitch dark forest.

This happens every time they approach the lights, but the last time Bilbo becomes separated from the group and is put to sleep by a spider. The giant spider tries to spin a web around him and keep him for his supper, but Bilbo awakens in time to use his sword to free himself and kill the spider. This act gives Bilbo self-confidence, because he did it all on his own. He eventually finds the others, as they are all bound in webs built by giant spiders. He uses the ring to help him attack the spiders and free the dwarves.

They are very happy to be free, until they realize Thorin is missing. He has been taken prisoner by the Wood-elves and thrown in the dungeon by the Wood-elf king. The king thinks Thorin is there to attack him and he does not believe Thorin, when he tells him all he and the others want is some food.

The rest of the dwarves are caught by the Wood-elves and taken to the Elvenking. The dwarves do not answer his question, instead they are angry and rude to him. He puts them all into the dungeon. Bilbo, who put on his ring before being caught, is in the castle with the dwarves trying to find a way to help them escape.

One day he hears the guards talking about another dwarf, who is being held in a deep dark cell. Bilbo understands they are talking about Thorin, so he finds the cell and talks to Thorin. He tells him the other dwarves are being held prisoner and he is free because of his special ring. This gives Thorin hope that they might escape from their prison.

Bilbo discovers there is a river that runs under the castle, which is used to move barrels of wine and other goods to the castle. The empty barrels are thrown through trap doors in the king's cellars and floated down the river to where Forest River merges with Long Lake. This will be a way to free the dwarves not only from the castle, but from the forest also.

Bilbo is lucky one night, because the king's chief guard, after drinking some potent wine, falls asleep. Bilbo is able to steel the keys to the dwarfs' cells and lead them to where the empty barrels are stored. The dwarves are grateful to be freed from their cells, but they are not happy about the thought of floating in a barrel down a river. Bilbo convinces them this is their only chance to escape, so they do as he says. He manages to slip through the trapdoor by hanging onto the last barrel as it is being thrown down into the water.

As they all travel down the river, Bilbo is having a hard time holding onto the barrel he used to escape. The next day, after Bilbo spends the evening in the forest trying to dry off and have a bit of food to eat, the barrels are tied together for the journey to Long Lake. The dwarves are free from the castle, but Bilbo does not know if they are dead or alive in the barrels.

The troupe endures having no food, being caught by giant spiders and Wood-elves only to find themselves floating down a river in barrels. They have a new respect for Bilbo, after he saves them from the spiders and develops the castle escape plan. Bilbo begins to have new respect for himself, because he realizes he can help himself and others without being dependent on outside help.