1. Chapter XII Recap: Inside Information
When we finished reading Chapter XII, Bilbo had tricked Smaug into showing off his underbelly where Bilbo’s sees a weak spot in his armour. Bilbo ran back up the passage to tell the others this news. A nearby thrush is listening to Bilbo.
Smaug, in his anger, destroyed the mountain side where the secret door was, trapping Bilbo and the dwarves INSIDE the mountain.
Smaug has left the mountain to get revenge Laketown because he guesses (from Bilbo’s riddles) that the people of Laketown are somehow involved.

2. Chapter XIII Summary: Not at Home
The dwarves are trapped in the mountain for two days before they decide to go all the way down into the dragon’s lair.
They find it unoccupied. Smaug is gone, but it is full of treasure, and they wander around gathering treasure, putting on armour, and picking up weapons.
Thorin tells them all to look for the Arkenstone, a very special stone that is an heirloom in his family of Kings.
Bilbo finds the Arkenstone, but does not tell Thorin. He pockets it.
They leave the mountain out the Front Gate in search of food.

3. Chapter XIV: Fire and Water
Flashback two days to the point when Smaug destroys the side of the mountain.
The humans of Laketown see the flashes of Samug destruction, and they brace themselves for an attack.
Smaug destroys Laketown with fire, and many people survive only by jumping into the water.
Finally, Bard, an archer, and descendant of the old town of Dale, shoots an arrow into Smaug’s weak spot.
He knew where to aim because the thrush told him what Bilbo said about Smaug’s underbelly.
The dragon is dead, but Laketown is destroyed.
The Elvenking sends help to Laketown and decides to march to the mountain, where they assume the dwarves are dead and the treasure lies unguarded.

4. Chapter XV: The Gathering of the Clouds
Roac, an old raven, returns to tell the dwarves that Smaug is dead.
He also tells them that an army of Elves and Humans are marching towards the mountain.
The raven tells Thorin to trust Bard.
Thorin will trust no one, and he orders the dwarves to fortify the mountain against attack.
Bard arrives and requests/demands a reasonable share of the treasure (to rebuild Laketown).
Thorin refuses. He sends for reinforcements from his relatives to the north and prepares for battle.
Also, don’t forget, Thorin is still searching high and low for the Arkenstone!