"He said I had to give him three guesses, and then straight away he guessed "Handses", just like that, in his nasty hissing voice: "Handses". Well, it was by the merest squeak I had only just that moment taken mine out again, do you see? So that was his first guess." Bilbo holds up three fingers, then slowly folds one of them. "Wrong!"
The dwarves crowd closer, watching their burglar's lively face in the light of a frail Mirkwood fire. Above them the branches are black and choking, and they are glad of a story to take their minds far from here, to an adventure which ended well. The hobbit is milking it, of course, revelling in being the centre of attention - but what if he is? It's a dramatic story; none of them begrudge a small hobbit who is no fighter, and yet has acquitted himself to date better than any of them could have expected, if he is making it sound more dramatic still. It is not to be supposed they believe very much more than half.
"What was his second guess?" Ori prompts him.
"Knife," Bilbo tells them, and wonders, a little affronted, what is there in that to make Fili choke on his pipe? Presumably the Prince finds something amusing in the notion of Bilbo with a knife, and really that is too bad of him, after all they have been through, and when Fili has seen Bilbo use Sting.
"Wrong again!" he says, lowering the second finger. "So there he was, down to his last guess, and what do you think the cheating creature said next? He said "String - or nothing!" - two guesses at once, but after all, what could I do about it, if he chose not to honour the rules? He was wrong on both counts, and had lost. You should have heard how he screeched! But I - well, I got Sting out, don't you know, and I made him show me the way out."
The dwarves' admiration is really rather gratifying. Ori is watching him with rounded eyes. Bofur, no mean entertainer himself, leans across the fire to re-fill Bilbo's horn cup, clinking his own against it in salute. True, there is something almost rueful about Nori's wary respect, and Fili is still smirking away to himself at goodness only knows what. But on the whole Bilbo can not help but feel rather pleased.
"But what did you have in your pockets?" asks Ori.
"Oh, that rag of stuff Bofur tore from his saddle-cloth, that time when I needed a handkerchief. Do you remember, Bofur? Well, I knew he would never guess that."
The older dwarves are talking seriously amongst themselves, a little apart, and have paid no attention to the tale. Gandalf has deserted them long since on some errand of his own - and Mahal knows Nori is not one to point the finger at a fellow liar's mistakes. So there is no-one to suggest that in fact Gollum could quite well have guessed right. Indeed, from the way Bilbo has described him, you might suppose Gollum would think a filthy rag a very likely thing to find in a pocket. Bilbo was luckier there than he seems to have realised.
"It's a good story," they tell him.
"No, no, it's all true, I assure you," says Bilbo, without a whisper of shame. "Fili - why are you laughing?"
"Knife? Did he truly guess Knife?" and Fili shakes his head at the folly of it. "Mahal, what fool keeps a knife in his pocket - that would be the first place they'd look!"
"They'd look? Who'd look?" wonders Bilbo.
But the others are too busy laughing at Fili now to explain, and he does not understand where this sudden hilarity has come from, nor, when Bofur shakes Fili jokingly by the scruff, why Kili shouts, "Careful, Bofur, don't cut yourself!" and they fall about laughing again.