Author's Note: Well, I've kept my promise. I've managed to write several chapters this weekend, so here is chapter 53 just as I promised. Fifty-Three chapters and we are finally at the Thorin/Bilbo reunion chapter... YAY! I know there were some who thought we'd never get here... and to be totally honest, there were times when I thought so too.
I'm actually pretty happy with this chapter, it's stayed pretty much exactly how I originally imagined it when I first started writing this fic February last year. However, in saying that, I know while I'm happy about how this chapter turned out, I know there might be some of you who won't be. I got a lot of mixed reviews as to how people wanted this reunion to go, some of you wanted a full out screaming war between Thorin and Bilbo when they reunited while others wanted fluffy romance and a few wanted a more subtle approach. I went with the more subtle approach with a tiny bit of a twist. I didn't think I would have fun writing this chapter but I was pleasantly surprised by, once I started writing it, just how easily the words started to flow out on to the page.

Anyway, I do hope you enjoy this chapter; I know that this chapter has been pretty much the most awaited for and anticipated chapter in this whole fanfic... beside from Thorin and Frodo meeting. Hopefully I haven't disappointed you all.

Chapter Fifty-Three

Within a Dream

A Waking Dream

Bilbo was not sure what it was that stirred her from her slumber. Not a nightmare for once. In fact she couldn't even recall a single dream she had dreamt during her sleep. This was a most uncommon occurrence for her. Usually she could remember her dreams in near perfect detail.

And it was for this reason that made Bilbo truly question if she was indeed even awake. It would not be the first time that her dreams took on the appearance of feeling so real and life-like she actually believed that she was indeed awake. This generally led to her sleepwalking and waking up in odd places, like her pantry or out under the party tree.

She sat up and swung her legs out of the bed as quietly as she could, for even in her dream she was conscious not to wake her son, even her imagination's son. She was dreaming of a room within the Lonely Mountain, of that she was certain, even though it was a room she had never seen before during her extremely short stay within the mountain before everything turned disastrous.

She winced at the memory before shaking herself. No, she would not dream of any of that tonight, no tonight she would dream only of the mountain. She was curious to see just how much of the mountain she could remember in her dream.

With a dressing gown wrapped tightly around her, even in her dreams she made a point of keeping warm and even if she did run into someone else in her dreams, she would at least be decent. Her ring sat upon her finger; she couldn't remember when in her dream she had put it on but there it was, nonetheless.

She set out without much purpose in mind except to explore her dream Lonely Mountain. It was much busier than she usually dreamed it to be, more dwarves walking around, dwarves she did not know but she paid them little heed and they paid her none at all and they all went about their way. She wandered aimlessly in her dream, humming snippets of her own tunes, at times finding herself quietly amused when a dwarf guard looked about him in confusion as she walked by.

Her feet took her down many corridors, most she didn't recognised and yet at the same time she knew immediately where her feet were taking her.

She ran her hand lightly against the stone walls of the corridors as she walked, her feet never faltering for a moment. Her lips twitch just slightly as she finally came across one of the many entrances to Smaug's bedroom, empty now of all its golden glory.

She sat down heavily upon the steps leading down to the depths of the massive cavern, her eyes unable to see the walls or carved stone ceiling above, the darkness too great it was almost oppressive.

She wrinkled her nose as she picked up the slightest hint of dragon on the air. The air was no longer as foul as it had been the first time she had stood in this room, searching for that accursed stone but still the stale air held the scent of dragon and Bilbo predicted would do so for many decades to come.

Did the gold, she wondered, and the jewels and other treasures that had been horde in this miserable place reek of dragon too? Or had they, upon their removal from the hall, lost the smell of dragon unlike the stone walls around her.

This was truly a strange dream. She had dreamt of Smaug's bedroom many, many times before and always the giant worm was present, along with the golden horde.

She swallowed thickly as her eyes instinctively hunted for the earth-bound star in the dark space around her, her eyes searching for the light of the stone of like which had not been seen in the world for millenniums.

As she searched her hands curled loosely in her lap, remembering the weight, the beauty of trapped starlight, the warmth. But her hands quickly became fists, as the memory became tarnished by fear, regret and hatred.

What was the point of such beauty when all it caused was grief and war? Nothing. Such beauty was never meant for this world, only the Valar could truly appreciate it and even they, they had fought over such beauties, oh so very long ago.

She shook herself, wondering how much longer it would take for her to wake and to find herself in some peculiar place due to her wandering, sleeping feet.

She sat there on the stone step, twisting her funny magic ring on and off her finger, her mind wandering over times long past. It was strange now, remembering a time when she did not have Frodo in her life, as he was such a centre point of her everyday existence.

She started to contemplate pinching herself – this dream truly had gone on long enough and she was starting to fear what nightmare might be sneaking around in the darkness when she heard movement behind her, the quiet noise of someone awkwardly shifting their weight from one foot to the other. Not the most frightening noise in all the world, not by far. She didn't even bother looking around behind her, for somehow, in the very depths of her heart she knew who it was.

"I know you're there." She said once it became clear that he wasn't going to announce his presences. "You might as well come out."

She could almost sense his hesitation but after a moment she heard footsteps moving slowly behind her.

"Hello Thorin." She said when she felt warm presences against her back.

"What are you doing here?" Thorin asked softly, his voice filled with such emotions that he could barely mask them behind his usual calm, stiff tone.

"Hmmm," she looked around the darkness, tucking her chin into her hand, "I was dreaming and here I ended up. It has been a very odd dream. Boring even… well, until now."

"You think this is a dream?" he sounded amused now, like he was fighting back a chuckle while at the same time there was a note of apprehensive behind his words.

She cocked her head to the side, still not looking behind her, at him. If she did look around, would he even be there? Or would he disappear? Or would he become the Thorin who haunted her dreams for the last eleven years? No, it was better not to risk it.

"I don't know," she admitted with a shrug and truthfully she didn't care, not at that moment. "It's not a bad dream though."

"It is not?" Thorin asked in a tone he was clearly forcing to keep light.

Building up her courage, she finally forced herself to look behind her, up at Thorin, his body outlined by the torch light from the corridor outside the entrance to Smaug's bedroom.

"No." She smiled slowly before looking back around at Smaug's bedroom.

"It looks so different." She commented softly. "You would never think this was once Smaug's bedroom."

"Amazing what removing all the gold and treasure can do to a room." Thorin's reply caused Bilbo to snort, amused by his attempt at humour. She had quite forgotten that Thorin did have some sense of humour; he just wasn't particularly talented at making jokes.

They fell quiet for a time, though it was not uncomfortable, it was almost companionable. Bilbo heard Thorin mutter something under his breath.

"Pardon?"

She heard him chuckle.

"I said, 'like mother, like son'."

She looked back at him again, less afraid of what she might find this time, her eyes questioning. Thorin met her gaze with surprisingly soft eyes.

"I am guessing Frodo hasn't told you all of his adventures?" Her heart gave a tiny unsteady thump at the way Thorin spoke Frodo's name, amusement intertwined with fondness.

"No, not all of them as of yet. Why?"

"Wandering feet, our son has." Bilbo waited for the stab of pain to shoot through her chest at Thorin's calm acceptance of their son, his almost careless mention of their relationship, but it never came. Only warmth filled her chest.

"That he does." Bilbo said softly, "so… you know then?" she couldn't help stammering as she spoke, "That Frodo is yours… you accept that?"

"Of course. Without a doubt."

Bilbo smiled widely then, her heart warm and light, a great weight lifted from it. Of course he did. How could she ever have thought that Thorin would not accept Frodo?

"Does he know? Frodo?"

"Yes. He figured it out." Thorin admitted with fond exasperation.

She let out a small laugh, shaking her head.

"Of course he did."

"He was very… accepting." Thorin continued slowly. "is very accepting of it all. I feared that he might… that it might be all too much for him – he is so young after all – that he might become overwhelmed, but he has accepted everything that has happened to him while he's been here with a smile and with maturity far beyond his years."

"He's an old soul." Bilbo replied with a small smile. A strange look flickered across Thorin's face before he looked away from her, staring into the darkness of the vast chamber.

"You have no idea." He muttered, causing Bilbo to frown.

"How do you mean?" She asked but Thorin simply shook his head.

"He is an old soul," Thorin agreed instead, not quite meeting her eyes causing her to huff with irritation.

"He is smart," Thorin continued ignoring her irritation, "so very smart. And cheeky."

Bilbo felt some her irritation slide as a groan slipped pass her lips.

"Oh no" she sighed, her tone full of unconditional motherly love, "What has he said? What has he done?"

"He has said and done many things. He has inherited your talent for trouble. Or rather finding it, maybe?"

She gave another huff.

"I never went looking for trouble;" she replied primly, "trouble just appears to have a knack of finding me. Unlike you, I never went charging head first into a situation that looked like, right from the beginning that it was going to end badly. I pray he hasn't inherited that trait from you."

"Is that the only trait you hope he hasn't inherited from me?" he asked his tone quiet, almost bleak.

She sighed.

"Thorin…"

"Speak the truth, you have every right to." He said softly.

"There are many traits that you have that I hope he has and will inherit. Many. But yes, there are some, and they are few, mind you, that I hope he hasn't. But if he has inherited them, well…" she stared down at her hands, her heart aching, "well, we'll figure it out. You have recovered, and I'm sure if the situation arose, so would he."

"The situation will never arise." Thorin muttered furiously, his body stiff and defensive.

"You can't promise that," Bilbo whispered, "but we can hope and if we must, we can prepare. But I pray that you are right, all the same." It would be nice, not to go through that horror again, she thought mournfully to herself.

She could hear Thorin shifting awkwardly from foot to foot again, could almost taste his worry and discomfort.

"What is it?" She asked as she looked up from her hands and back at him.

He sighed softly, a sad chuckle escaping his lips.

"I must admit," he spoke slowly, his tone laced with regret, "I am waiting for the screaming, for the rage and hate. You have every right to hate me; what I have done in the past is inexcusable and I will not ask for your forgiveness for I have no right to ask anything of you. I…" he trailed off with a small groan of frustration while she simply stared up at him, her mouth hanging soundlessly open.

"This…" he growl, "is not coming out how I hoped. The words, they were there and now…"

"They've gotten lost?"

He gave her a very dry look, running hand over his short beard. She had just noticed in the torch light that his beard was as short as it had been during their quest. This caused her a jolt of surprise. She had thought, once he had reclaimed his thrown he would grow out his beard to be a long and as magnificent as his forefathers. But he had not… why?

She wanted to ask him but maybe now was not the right time, not with him struggling over words she had never expected him to say. Maybe this truly was just a very odd but life-like dream. How else could she explain the dwarf before her and his odd behaviour? Thorin… apologizing? To her, of all people?

"Thorin…"

"I'm sorry…" She gawked at him, gawked at how awkward and yet completely sincere he sounded, "I'm sorry for everything. I'm not asking for your forgiveness but I do wish you to know that I am truly sorry, for everything and while I know that no matter how many times I apologize to you and how sincere I am, I know that it will never be enough. Nothing I do or say will ever be enough or make up for the grievances I have caused you, but I…"

"Thorin," She couldn't help but start giggling, "Its fine… I forgive you." She couldn't believe what she was hearing! Him… apologizing to her? She was almost giddy with joy.

Thorin snorted.

"You're tired." Thorin grunted, "Doesn't count when you're tired. You're hardly coherent. You even said yourself that you believe that this is all but a dream."

Bilbo gapped at him.

"Dream or not…" She started but he waved her off.

"When you are fully awake, coherent and not believing for a single moment that our conversation is taking place in a dream, then you can tell me that you forgive me. Until then, as much as I would like to, I can not believe that you truly do forgive me. You shouldn't, really."

Bilbo rose to her feet, her arms crossed against her chest, her eyes narrowed.

"Shouldn't whether or not I forgive you be up to me? Solely me?"

"Of course." Thorin agreed calmly, "But it is late and you are tired. You are most likely not thinking straight. Do you still believe you're dreaming?"

Bilbo went to snap at him that no, she did indeed believe that she was awake and not dreaming except… hadn't there been moments during this whole conversation that she had thought that this was such a nice dream, such a change from Thorin snarling out his rage and accusations at her.

She closed her mouth and pinched her arm, wincing at the pain that went up it but no, she didn't wake up; Thorin still stood there in front of her his dark eyes watching her rub her arm where she had pinched it.

"I still forgive you," She grouched before her heart started to pound, "but that's really not what's important here." Suddenly all of her anxiety and desperation rose to the surface, almost crushing her beneath its weight.

"No?" he sounded genuinely confused.

"Of course not!" She cried, "What does it matter if I forgive you? That's not what's important! Never was. What's important here, is you? If you forgive me! You banished me! For betraying the company, for stealing the Arkenstone! And Frodo? What about him?" she was close to hysterics now, her whole body shaking as her mind filled with all the panic and terror that had built up inside of her all these years so that she could barely see straight, all the things she feared for the last eleven years came crashing down upon her head.

She was so sick with sheer terror and anxiety that her head swam and she was certain she was going to faint if Thorin hadn't grabbed her forced her to sit down upon the step once more, anchoring her to the present.

She didn't understand what he was saying to her, only that he spoke with a soothing voice that helped her focus upon her erratic breathing, to force her heart rate to return to a more reasonable pace and for the blood to stop pounding in her ears.

She sniffed and rubbed at her eyes, which had grown wet, with the back of her hand. It had been such a long time since her last panic attacked and now she had gone and had one right in front of Thorin Oakenshield, of all people.

"Sorry." She muttered not looking up as she continued to scrub at her face.

"Why?" Thorin asked his tone questioning, but it was gentle questioning. She snuck a look up at his face and even in the dim light from the torches glowing from the corridor she could see that he wasn't judging her or looking at her as if she were a burden or weak.

She looked away and simply shook her head.

"Billanna…" she looked up at him, her heart in her throat. How long had it been since she had heard him say her name, in that voice? "You have no need to ask for forgiveness… for anything."

"But…"

"No." His voice was firm but not cruel, "You have no need to apologize for anything."

She stared up at him in disbelief.

"You can't truly believe that!" She cried, "After what I did! I betrayed you! I stole the Arkenstone!"

"To save our lives!" Thorin cut in quickly, his tone demanding for her to listen and not to argue with him, "everything that I saw at that time as a betrayal from you was you trying, as you had done so many times before, to save us. I was so blind with the gold sickness that I saw nothing else but betrayal, I saw nothing of your true motive, your love, your desire to protect and save us. I was blind and I am sorry."

Bilbo gapped at him.

"And… and Frodo?"

Thorin sighed.

"Another matter entirely but again, you have nothing to apologize for in regards to our child. You have kept him safe, you have loved him. At that time I was a danger to both of you. You did what was best for our child, even before you knew of his existence."

She pressed her hands to her eyes, feeling tears filling her eyes.

"Come," Thorin said gently, taking hold of her arm, his fingers careful and light upon her forearm, ready to release her the moment she gave any hint of discomfort, and helped her stand, "you are tired. And it is far too late for this conversation."

"You're only saying that because I'm getting teary." She grumbled though she was feeling truly exhausted, physically and mentally.

"Yes," Thorin agreed, "I've never had any talent for comforting someone who is crying. But it truly is late, and I would rather have this conversation with you when you are fully awake and not thinking that this is some bizarre dream. Your dreams are truly so life-like?"

"Yes."

"Then we'll definitely be finishing this conversation when you are fully awake. I want you to be fully aware of everything that you say to me so there is no chance of misunderstanding or you saying something you do not mean."

She opened her mouth to protest but was stopped by Thorin shaking his head.

"I do not say this to offend you but rather I am saying these things on your behalf. You have spent much of this conversation still believing you were in some kind of dream and it would not be fair of me to hold you to anything you have said just now. And I am not going to. Everything that you have said in regards to your forgiveness towards me and the grievances I have committed against you I will take with a grain of salt." Bilbo once more opened her mouth to argue but was once again cut off by Thorin, "because you are tired and not thinking straight."

"I know that I am not dreaming!" Bilbo grumbled furiously.

"Now you do." Thorin agreed, "But before…" he shook his head. "Come; let us return you to your chambers. You're still recovering from your ordeal."

She sighed softly but nodded.

"Fine." She grumbled.

"We will finish this conversation, Billanna." Thorin reassured her as they started slowly up the corridor.

"I'm not worried about that." Bilbo sighed, "I'm bothered that you don't believe me. I maybe tired and thought that I was dreaming, but I meant what I said."

Thorin shook his head, his face twisting unhappily.

"You really don't believe me?" she gawked.

"Just as you do not believe me." He pointed out and they stared at each other.

"That's…"

"It's the same." Thorin rumbled, "Only, you have every right not to forgive me."

She gave a huff.

"Keep this up and I might start thinking you don't want me to forgive you."

She watched his face closely but his face was carefully closed off and he refused to meet her eyes.

"Impossible dwarf!" She grumbled, "Fine… be like that." They walked on in silence, slightly more awkward than previously but still companionable.

"How did you know? Where I was? How did you know?" She asked as they moved through deserted corridors; she was fairly certain that these were not the corridors she had come down originally.

"Hmmm? Oh, I heard your humming. Your 'Man in the Moon' tune is very recognizable."

Bilbo blushed brilliantly and ducked her head.

"It can hardly call it mine anymore." She muttered shyly, "Bofur owns that song, the moment he sang it that first time in Rivendell. I've made up another song, similar concept but different."

"You'll have to sing it sometime." Thorin offered.

Bilbo gave a small laugh.

"Oh no. I make up the tunes, others sing them. Ask Paladin and Saradoc to sing it for you." she laughed.

"I think not. I believe they're not overly fond of me."

"Give them time, they'll come around." Bilbo replied as she fought back a yawn. She hugged her arms closer around herself as she walked, trusting Thorin to lead her back to her room as her eyes dropped close.

She jumped a little when Thorin suddenly reached around her, opening a door that had suddenly metalized beside her.

"Mama?" her tired face broke into a wide smile at the sleepy call of her son, who was peering with bleary eyes from the bed, his perfect little face outlined by the candle still burning by his bedside table.

"Hello my heart. Did we wake you?"

Frodo yawned and rubbed his eyes before blinking sleepily between her, as she moved to his side, over to where Thorin was hovering by the doorway.

"Hello." Frodo gave Thorin a little wave. "Is it morning?" Frodo asked his mother.

"Hardly." It was Thorin who answered him, moving slowly further into the room.

"Oh…" Frodo yawned again, "Will I see you tomorrow?" Frodo asked Thorin, "Haven't seen you in forever."

"I will come and see you tomorrow if your mother permits." Bilbo shot him a look that was clearing questioning his sanity.

"Of course you can." Her voice was almost a growl. As if she was going to stop father and son from seeing each other, especially when they appeared to be getting on so well. She wasn't sure exactly if they were at the father and son emotional level yet but she knew that Frodo liked Thorin (every free moment they had spent together yesterday afternoon had had Frodo gushing over Thorin) and well, going by Thorin's look every time Frodo was brought up in their conversation, and not to mention the look he was giving Frodo now, Bilbo suspected the Kingly dwarf was more than a little fond of their child.

"Oh good." Frodo cheered before falling immediately back to sleep.

Bilbo gave a small amused snort as she brushed a black curl from her son's face. Clearly his ability to fall asleep anywhere at any time had not been affected by his recent adventure.

"I will take my leave." Thorin said softly.

Bilbo nodded mutely. She was quite a bit more alert than she had been previously and was feeling more than a little overwhelmed by everything that had transpired between them. This was not at all how she had expected their reunion to be like, not in Smaug's bedroom, in the middle of the night with her believing that she was dreaming the whole thing. She actually felt a bit of a fool.

Had she really blurted out, giggling as she went that she forgave him for everything he had done?

It didn't matter that she had forgiven him in her heart because that was between her and her heart. He wasn't meant to know! Not yet at least.

And her brain, which had always tried to choose the path of logic and reason, was positively fuming now that it was fully awake and comprehending what was going on. How could she been so stupid?

She shook her head, feeling suddenly world-weary.

She heard him sigh heavily from where he stood near the doorway of her chamber.

"As I said before," He spoke softly, his words heavy, "I've not taken your words to heart. You thought you were dreaming and things we say in our dreams are not what we wish to say in our waking hours. But," and he waited until she met his gaze before he continued, "I do ask that you do take my words to heart. I am not seeking for your forgiveness for I have no right to ask for it, but I do wish for you to know that you have nothing to ask for forgiveness for."

"I'm still banished, a traitor…" He was shaking his head before she had even finished speaking.

"No, you're not. Well," He looked away from her and stared at the wall above her head, "Balin, Ori and I are working of rectifying the situation."

"Meaning…" She could scarcely breathe.

"Meaning you will no longer be seen as traitor," he winced as he spoke that wretched word, "nor will you be banished by our laws. Please believe me when I say that for years Balin and Ori have been working tirelessly to rescind both your banishment and label of traitor." He snorted and shook his head angrily, "The words of a mad king are followed without question but once he comes to his sense and tries to change it, to fix what he has broken he is met with nothing but endless stone walls and challenges." He spoke with grinding bitterness.

"I'm…."

She was stopped by the glare of flaming blue eyes.

"Don't you dare think for a moment about apologizing," He growled furiously, "I caused this mess; I will see to it that it is fixed. I will not have you apologizing for something that was entirely my fault. This would never have happened if I wasn't so weak to fall for the gold sickness."

"Thorin…"

He waved her off, breathing heavily, his face twisted in pain.

"Not tonight. I said that before. I said that we would talk, that you would have your say and I would try my best to make things right by you. But all those words must wait for now. You need your rest. You have had quite the ordeal and you need to recover from it."

"Alright." She was at a lost as to what else to say, she was simply too taken aback by this Thorin, who was so different from the Thorin in her dreams and the Thorin of her past that she was lost as to what she should do or say. He was so different and yet completely the same.

"I will leave you both." He nodded his eyes lingering for a moment on her, their son, his eyes unquestionably softening as he stared at Frodo. He seemed to remember himself after a moment and turned his full attention on to her.

He surprised her completely by bowing to her deeply; something he had never once done to her before (except for those few times when he had been teasing her, those few happier times when things were just right and good in their world).

"Good night." She squeaked as he rose to his full height once more. He simply nodded, placing his hand over his heart before leaving the room silently, closing the door behind him.

Bilbo slumped against the bed, heart pounding.

All of that had to be a dream. It just had to be. It had been all too surreal for it to have happened in real life. Thorin… apologizing to her! Thorin expressing concern for her well-being?!

A dream, all of it had to be a dream…

She rubbed her forehead as she climbed back into bed, Frodo mumbling softly beside her. What if it wasn't a dream? What if…

She pressed her hand to her heart, over where her funny ring once more hung upon its cord. She ran a finger over the cool metal for a moment before lowering her hand to her lap.

What if everything that had happened was real and Thorin…

No, she wouldn't analyse what had transpired this night now. As Thorin had repeatedly said himself, she was tired, over tired even and still suffering from the after effects of her misadventure. In the morning she would think over what had happened this night, analyse and over-analyse everything Thorin had said and done, but for now, now she would try and sleep. And hopefully, hopefully she would not dream. Not of him, not of any of thing.

She curled herself up around her son and closed her eyes, feeling warmth and darkness wrap itself around her, hugging her close to its breast. Her breaths grew deeper and her eyelids heavier and within moments she was asleep, her mind filled with senseless and harmless dreams that she would not remember in the coming morning.

Author's Note: So that's that then, done and dusted, it has finally done. This isn't the end of course, barely anything has been resolved between them, it just when they do meet under more normal circumstances they won't be so awkward around each other now and Bilbo won't have so many mini-heart attacks with him nearby.

Ok, just because I know, or rather suspect I'll be asked these; I'll try and answer them here and now.
Why did I have the reunion in Smaug's bedroom? Because simply, I felt like. It made sense in my head for them to have their reunion in Smaug's bedroom (it was if there or the battlements over looking the front gate, but I felt that would be crowed with guards, so that idea was ditched). There's a lot of history in Smaug's bedroom, for Bilbo in particular, its where, in my verse she starts to doubt Thorin's love for her, that he is willing to put the Arkenstone and gold above her life... Though those thoughts were obviously not mention here, but they will be, at a later date when Thorin and Bilbo actually have their 'Conversation'.
Why was Bilbo even going to Smaug's bedroom in the first place? I have this idea in my mind that Bilbo has something of a photographic memory when it comes getting around places. She was subconsciously testing herself to see if her "dream" Erebor held up to "real" Erebor and the best way for her to test that was to find her way to Smaug's bedroom. I wasn't just recycling the idea from Frodo and Thorin previous mid-night conversation.
How could Bilbo think she was dreaming for so long once Thorin got there and they started talking? Bilbo has been the victim of some extremely vivid dreams/nightmares over the past decade. A lot of her dreams, her nightmares feel very real to her, that she is actually living them in real-time. That's why it so hard for her to wake up from them because she does believe that they are real. However in this case, Bilbo has actually convinced herself that she is dreaming and what has happening isn't which is why she is so calm and giggly around Thorin, which in any other circumstance she would have been at their first meeting.
Has Bilbo forgiven Thorin? No, not in her head, she hasn't. In her heart, she has because her heart gets that the things that happened between them were somewhat out of Thorin's control, he was blinded by the gold-sickness and she still does love him very much. However in her head, where her logic and practicality lives, she is still very wary of him and not quite ready to forgive him. Her head has to live with the nightmares his actions caused when he was fully consumed by the gold-sickness. Her head isn't about to let that go. So yeah, despite what she says in her "dream" that was her heart talking, not her head, her logical brain was taking a well-deserved break from the usual nightmares. And Thorin got this, he understands immediately and this the reason why he, as much as he would truly like to, not taking her forgiveness to heart because he truly does get it that she really does think she's dreaming.
Hopefully these will answer a few of your questions and I truly hope this chapter live up to your expectations and didn't disappoint to many of you. I know a lot of you really wanted for Bilbo to scream and box Thorin's ears and so on. Who says that's not to come, this is after only the first meeting and they'll be plenty more of Thorin/Bilbo moments to come. Its only a matter of time before Thorin says or does the wrong thing to get Bilbo yelling at him.