Bilbo Baggins, Thorin Oakenshield, and the company of dwarves have successfully reclaimed the vast wealth of their homeland, Erebor, from the dragon Smaug. However, their victory is short-lived as they face the consequences of unleashing the destructive dragon onto Lake-town. As Smaug's fiery wrath devastates the defenseless settlement, the survivors, led by Bard the Bowman, find themselves in dire need of aid and shelter. Amidst the chaos, Bard emerges as a leader and slays the dragon, but this act of courage does little to ease the looming challenges.

With the Lonely Mountain reclaimed, the dwarves must now defend their hard-won treasure from multiple emerging threats. News of Smaug's fall triggers a convergence of various armed forces, each with designs on the horde of Erebor. The elves, led by Thranduil, seek prized heirlooms buried within the mountain, while the men of Lake-town claim compensation for their losses and assistance in rebuilding. Meanwhile, Thorin, overcome by the dragon-sickness, grows increasingly obsessed with the riches and staunchly refuses to share any part of the treasure. As tensions escalate, dark forces led by Azog the Defiler march towards the mountain, aiming to seize control and extinguish the lineage of Durin. With a great conflict brewing, Bilbo desperately tries to broker peace among the allies, foreseeing that unity is their only hope against the approaching army of darkness.