The guards then caught up, capturing Bard and locking him up in the town's jail cells.

Smaug's gaze then went from the hobbit to the Arkenstone.
"I am almost tempted...to let you take it." he crooned, almost mockingly. "If only to see Oakenshield [i]suffer[/i]. Watch it destroy him, watch it corrupt his heart...and [i]drive him mad[/i]!" the dragon's tail lashed as he thought it over, then shook his wide head, his eyes flashing with fierce fire. "But I think not. I think that our little game ends here. So tell me, thief," he asked, his jaws opening wide, "how do you choose to die?!" the dragon finished in a thunderous roar, fire spurting from his open maw. He roared again in fury when he realised that the hobbit had disappeared again, and doused the whole hall in flame. He was bound to have hit that little creature somehow that way.

But Bilbo luckily, had managed to seize up the Arkenstone, and retreat back to the stairwell he had come down into the chamber from. The hobbit barely got around the corner in time to avoid the flames.