The Hobbit is the story of Bilbo Baggins, a hobbit who lives in a hole in a hill. He enjoys a quiet life but it is interrupted by a surprise visit by the wizard Gandalf. Gandalf comes with a company of dwarves led by Thorin. They were searching to recover a lost treasure that was being guarded by a dragon named Smaug, at the Lonely Mountain. Gandalf decided Bilbo would be helpful to the team as a burglar.
On the journey, Bilbo and the dwarves encounter all sorts of villains and obstacles. While passing thru Elven country Bilbo and the dwarves stay at the house of Elrond, an old friend of Gandalf. During their journey they run into Trolls, Goblins and Giant Spiders. Bilbo does several things that help rescue the group. In these travels though, Bilbo has gone by a creature called Gollum, and gained a ring that makes him invisible when he puts it on. Gollum was once a hobbitlike creature, but when Bilbo meets him he has become a "small, slimy creature" with long webby feet, who lives in the heart of the mountain, paddling his boat on a lake. His most prized possession is his ring, which can make him invisible. He's obsessed with this ring, calling it by the name he uses for himself: "my precious." Bilbo finds the ring escaping being killed by Gollum.
This ring helps in battling the Giant Spiders and getting the dwarves out of the Elven King's prison. But the ring is especially needed when the group arrives at Smaug's mountain. Because Bilbo is the burglar he must go into the dragon Smaug’s lair and steal a cup. While there he finds the hollow of Smaug's left breast is not plated with his red-gold armor. When Bard, from lake town, strikes this spot, Smaug falls dead, his body crushing the city of Esgaroth. The survivors seek Bard as their new king but Bard declines the offer, as he intends to establish his own city.
Because the treasure is no longer being guarded several groups wanted it. Thorin wants the Arkenstone because it is an heirloom and he threatens to take revenge on whoever has prevented him from getting it. Bilbo decides that he will leave the mountain and offer the Arkenstone to Bard; then, Bard can offer the Arkenstone to Thorin in exchange for a fair portion of the treasure. When the battle begins, it includes men, elves and dwarves. They attack one another until Gandalf tells them the goblins, bats, wolves and wargs are coming. The armies join up...