Thorin and Co. try their luck at escaping by venturing into the dragon's lair. They find it empty and take whatever weapons and armor they choose. While in the lair Bilbo finds the Arkenstone and pockets it. Thorin and Co. then escape and make their way to a safe place..
Smaug attacks the town of Esgaroth. Bard then takes advantage of his one weak spot and kills him. The people of Esgaroth are now bent on securing the treasure with Bard as their leader. With the aid of the Elvenking they set out for the Mountain.
Thorin and Co. are warned of the approaching army by Roac, an old raven. Bard confronts Thorin and demands his share of the treasure for killing Smaug. Thorin refuses and Bard declares the mountain besieged.
In an attempt to avoid war Bilbo gives Bard the Arkenstone so Bard can use it as a bargaining chip in securing his share of the treasure.
Thorin discovers Bilbo's plot and exiles him. Dain arrives and a battle is about to begin when Gandalf warns them that the goblins and Wargs are on the way. The Battle of Five Armies takes place and in all the chaos, Bilbo is knocked out.
The battle is over and the dwarves, Eagles, elves and men have won. Thorin, Fili, and Kili were killed but Bilbo and the others have survived. Bard receives a share of the treasure and Dain becomes King Under The Mountain. Bilbo also receives a small portion and sets off for home with Gandalf and Beorn. They spend the winter in Beorn's hut before Gandalf and Bilbo set off for The Last Homely House