Trolls will eat just about anything but are also short-tempered and dull-witted, and they proceed to fight over cooking up Bilbo.
The commotion attracts the dwarves, who unfortunately come to the clearing one at a time. The trolls stop fighting just long enough to hide in the trees and throw a sack over each approaching dwarf. Soon, they have everyone tied up except Bilbo, who has been forgotten. The trolls decide to cook the dwarves immediately; but then a voice, which sounds like one of the trolls, starts an argument, and the three trolls start fighting all over again. This goes on for some time, until the trolls suddenly notice, too late, that it is almost dawn. The sun peeks over the horizon and the trolls all freeze--for sunlight turns trolls to stone. Gandalf then steps triumphantly into the clearing; he had been throwing his voice all the while, keeping the argument going among the trolls until morning. He and Bilbo release the dwarves, who are shaken but otherwise unharmed. Searching nearby, they find the trolls' cave and a number of well-wrought weapons, which they take as payment for their pains.
As the company sets off the next morning, Gandalf explains that he has checked the road ahead up to the last safe stop along their way. This is Rivendell, a city of elves located just beyond the Edge of the Wild, near the foothills of the Misty Mountains, which the company will have to pass. Approaching Rivendell, they are greeted by a number of elves, who invite them in to eat and rest. The next morning, they meet Elrond, the great chief elf, who is "as strong as a warrior, as wise as a wizard, as venerable as a king of dwarves, and as kind as summer.".
Elrond gives the company valuable information, for he can interpret the ancient runes on their new weapons and Thorin's map of the mountain. The swords taken from the trolls, he tells them, are from the great wars between the elves and the goblins, and they are famous goblin-killers.