Film set in Middle Earth. A dragon named Slagburns the city of Dale to the ground, and steals its treasures (incfluding the Arkenstone). All inhabitants in the city perish, except from three survivors: Princess Mika Milovana, the general Torin Oakenshield, and an unnamed watchman. The survivors want revenge, and seek the help of the wizard Gandalf the Grey. They need a dragon-slayer, and Gandalf chooses the hobbit Bilbo Baggins. Bilbo is reluctant to leave the peace of his own home, but falls for the princess and takes on the quest for her sake. Bilbo's companions are soon captured by monstrous "Groans" (actually trolls) who want to eat them. Bilbo manipulates the Groans to fight each other, until sunlight kills them. Later, Bilbo alone has an encounter with Goloom, and escapes with Goloom's Ring of Power. After crossing the perilous Mirkwood Forest, the group reaches Slag's layer in Lonely Mountain. The dragon is sleeping and Bilbo steals the Arkenstone. He creates a powerful crossbow and shoots the Arkenstone through Slag's heart, killing the sleeping dragon. Bilbo marries Princess Mika, and the two rebuild the city of Dale. They rule jointly for a while, before retiring together and settling in Hobbiton.