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During the journey to Erebor Bilbo Baggins is captured by the goblins of Goblin Town together with the Dwarves of Thorin Oakenshield. They are brought before the Great Goblin, who accuses them of spying, and is enraged when he finds out Thorin is carrying Orcrist, a sword the Great Goblin remembers from Gondolin. With the help of Gandalf the wizard Bilbo and the Dwarves escape and kill the Great Goblin, after which a frantic pursuit occurs.

Goblin Town is a series of tunnels and caverns, which lead all the way through the mountains, with a "back door" near the Eagles eyrie in Wilderland. The cave of GollumGollum is a fictional character from J. Tolkien's universe of Middle-earth. Originally known as Smeagol he was later named Gollum after the curious noise he made in his throat. His birth can be estimated to have happened c. the year 2430 of the Third Age. is close to this door.