Gandalf and the hobbits arrive back in the town of Bree. Sam wonders if Bill the pony ever made it back alive. They notice that the town seems less populated. When they arrive at The Prancing Pony, the innkeeper Barliman Butterbur recognizes them and welcomes them. They see very few other people staying at the inn, and Butterbur seems happy to have some business. After eating a meal in their rooms, Butterbur comes to speak with them and updates them about recent local troubles.

According to Butterbur, bandits and other malevolent foreigners have been passing through region, as well as other terrifying creatures that attack from the north. Butterbur suggests that part of the problem is that the Rangers went away and no one realized until recently how much they had been doing to keep the region safe. He tells them that several people from Bree were killed in a fight that broke out where a few locals joined with the thieving newcomers. Butterbur suggests that there is trouble in the Shire as well and no pipeweed has been produced there recently. However, he believes that no bandits are likely to attack them on the road because they are heavily armed.