The story begins where Thorin the Dwarf explains the history of the dwarf's treasure. He tells Bilbo how they found the mine where they produced these items that they would give to the human and elves. Thorin explains to him that dragons love gold and treasure and will take it at any cost. He then tells Baggins about the worst of all the dragons, Smaug. He explains how Smaug came and ruined the village by setting it on fire and demolishing the Dwarves mines. Thorin tells how he and some others make it out but sadly most of them die. Even to this day, Thorin says the Dwarfs never forget their stolen treasure.
The dwarf Thorin explains to Bilbo Baggins about the history of how the gold was lost in Bilbo's hobbit hole.
Thorin explains how they were making many fancy gold and jeweled items for the humans and elves that dragons love to horde and take for themselves.
Bilbo is on the edge of his seat as Thorin goes on to describe the fancy items that were stolen by the main dragon, the worst, Smaug.
Smaug the dragon comes in and lights the night and the trees while demolishing their mine and stealing all of the Dwarfs treasure.
Almost all of the dwarfs that were not outside die and some even go back to try to fight Smaug even though they know that they have no chance.
The dwarfs that did make it out like Thorin never forgot about the stolen treasure that was taken from them sinisterly by Smaug, death on wings.