The companions leave Esgaroth with a caravan of four barges. The barges push up the Celduin River to trade with the Wood Elves. After 4 days of travel, the floating caravan reaches the Wood Elf town of Celebannon.
The companions go to the only inn in town—‘Dindraug’—where they learn from the Elven traders that the spiders of Mirkwood have become more active in recent years, since the disappearance of the Necromancer. The forest goblins, on the other hand, have become less active during the same period.
Hengil visits the Sindarin scholar Luinwen’s abode. He asks the scholar to help him learn more about the black orb. She agrees, but tells the Dúnedan that it will take her several days of research.
Rothaar One-Leg, a scout and warrior in the employ of the Lake-town merchant Thal Eolsen, arrives at Dindraug early in the morning. He meets the party and informs them that his caravan has been ambushed by a band of goblins, working with a large creature. He does not know what the large creature is, as he was not with the caravan at the time of the ambush; instead, he was scouting the trail ahead of the caravan, and discovered the dead guards and wagon ruins upon his return. Rothaar believes that the goblins have taken at least one guard prisoner, as well as the loot from the wagon.
The Tale of Ungoliant
…Therefore Melkor said to her: ‘Do as I bid; and if thou hunger still when all is done, then I will give thee whatsoever thy lust may demand. Yea, with both hands.’
A cloak of darkness she wove about them when Melkor and Ungoliant set forth: an Unlight, in which things seemed to be no more, and which eyes could not pierce for it was void.
Upon the mountain-top dark Ungoliant lay; and she made a ladder of woven ropes and cast it down, and Melkor climbed upon it … Then Melkor laughed aloud, and leapt swiftly down the long western slopes; and Ungoliant was at his side, and her darkness covered him.
And in that very hour Melkor and Ungoliant came hastening over the fields of Valinor, as the shadow of a black cloud upon the wind fleets over the sunlit earth; and they came before the green mound Ezellohar.
Then the Unlight of Ungoliant rose up even to the roots of the Trees, and Melkor sprang upon the mound; and with his black spear he smote each Tree to its core, wounded them deep, and their sap poured forth. But Ungoliant sucked it up, and going then from Tree to Tree she set her black beak to their wounds, till they were drained; and the poison of Death that was in her went into their tissues and withered them, root, branch, and leaf; and they died.
And still she thirsted, and going to the Wells of Varda drank them dry; but Ungoliant belched forth black vapours as she drank, and swelled to a shape so vast and hideous that Melkor was afraid.