Thorin was the first one to know there was a dragon coming their way. It was because of his grandfather that he started to fear this day will come. He watched Thror with concern for quite some time now and he spent uncomfortable amount of time in the vaults. That wouldn't cause so much worry, dwarves did value gold above other things, but in succession his grandfather started to withhold greater and greater parts of gold and diamonds they were producing. Lesser amount of values did go out of the mountain than those whom would be left behind to pile up in treasury. That was a bad news because dragons could smell that amount of gold, it lured them from afar.
In his teachings Thorin learned what there was to know of dragons but there wasn't much to know about. They were vast, strong, gold hungry and almost indestructible. That's why Dale had those precious black arrows. That was the deal they had with humans, their task was to protect the wealth of which they depended onto, on which their town thrived and prospered. It would be too late when dragon would approach their mountain, angle for the arrows would be desperately wrong, right onto fire breathing mouth.
Thorin had feared that man's arrows wouldn't be enough, but Thror was confident and not concerned about much than his gold. Of course the day came when that dry, hot wind blew and cracked the pines. Thorin knew instantly what was coming by the smell of brimstone. The dragon was too close, Dale was far behind him; men had failed. As his fire cracked and burned around him and Balin he still had no fear, he had only confidence, it was their mountain, they were dwarfs, they would prevail.
As dragon roared burning everything in front of Erebor Thorin armed himself and stood with all dwarves that managed to react quickly enough. They stood determinant but that was all in vain. As the drake crushed their steel door into the mountain as they were wood he swept them aside as they were mere puppets. Thorin fell not caught by the flame and watched alive and not injured how the drake passes beside him as he weren't even there. And he, for the first time, realised that he wasn't even there, he understood how small he was as dragon feet stamped over dead bodies as they were rocks. There wasn't any hope, anything they could gain by fighting, there wasn't any way to penetrate dragons tick scales up close, swords and axes were mere chopsticks for him. As dragon disappeared into the mountain Thorin knew that all he could do is to gather his people and save what he can.
His father and grandfather were nowhere in sight so he ordered withdrawal, total exodus. After that he paced down after dragons footsteps knowing Thror is down there with his gold. He managed to pull him out before he confronted the dragon armed with nothing but his crown. Luckily dragon didn't care about them as he tossed around their treasure bathing in their gold. Thorin didn't care about that too much, he feared the fire that could caught up with them if that dragon chooses just to snort in victory sending burning flame through narrow corridors turning their mountain into the furnace.
When the light of the exit showed before them Thorin for the first time experienced fear, true dread that cut through his composure right to his core. The stone around them turned hot, the air was thick from the brimstone fire. With that came voice, deep like rocks rolling in the caves, barely heard but clearly understood.
"I can smell you Durin folks" he spoke slowly, Thorin could hear victory in his voice. "Thror, your smell became sour from age, your time is up old man, there's no need in chasing you, but that youngling with you is fresh, his fear new. Teach him to fear me, because if I smell him again near my gold, he will burn."
Thorin turned towards the darkness in which nothing could be seen, all lights were put down by lack of air; everything was full of smoke.
"My name is Thorin and I'm not afraid of you" Thorin yelled at top of his voice lying, feeling the fear in his gut as his voice went raw echoing around empty halls.
All he got in reply was a laugh long and joyous.
"Youngling, youngling, you gave me your name, now I'll hear if you even think of me and my treasure. My name is Smaug and I'll plunder your dreams with death and screams of all those who are hiding in their holes, too afraid to go out. I can hear them breathing. I'll let you go so you can live life knowing I took everything from you. Here, have a parting gift from me" he said and with that there weren't dark anymore, just blazing flame that burnt his eyes.
Thorin threw himself towards the light and rolled out of the mountain.
"Where were you?" Thror shouted on him. "Who taught you to speak to the dragon, there's no reasoning with them. You either kill them, or run as fast as you can."
With that he turned and left as it wasn't his mountain anymore. Thorin watched his people running away not believing it is over, that they had lost so quickly. He lifted his gaze and there they were. Their allies. Mighty Thranduil on his elk and his indestructible elves. His hope burnt up again and he called out to them ready to go into the flame in spite of his fear but Thranduil just turned his gaze away and took his people with him, denying them help which they offered many times searching from them white gems, always the white gems. Now they cared not for their words, nor gems.
As Thorin watched them go he felt his stomach turn cold. The world became vast place without any known rules, nobody had any debt to them; without gold or mountain they had nothing to bargain with.
But they had goal before them and they stood proud and tall. Thror took them onto mountains of Moria to reclaim their ancient homeland. It was a noble task, Orcs were known enemy, someone their size; someone they could defeat. It seemed like good enough compensation for their loss. To be thrown out your home isn't so bad if you make a better one to yourself, one you could easily defend. But Thror wasn't in his best mind, he weighed their opponent too recklessly. He led all of their best men into that battle without proper reconnoitre all proud and tall thinking he could never lose from orcs, after all they were lesser creatures.
Thorin followed him. He was young, far too young for a battle of that kind. Harder and tougher men fell from exhaustion and despair that day. It seemed that orcs are just pouring out of the ground. And worst of all was that they had a leader. That happened rarely, they were mindless creatures and not often they could find someone to lead them into organised battle. Azog yelled above dead bodies how he will kill every last one of Durin line just to put an end to them.
Thror charged at him but Azog's hand was too strong and Thorin faced unthinkable. As his grandfather's head left his body Thorin felt rage like anything he felt before. Nothing mattered anymore. The world became narrow and small. All that was in the world was Azog's face and his hands. He didn't think of winning, of the battle, he just thought of next move. He grabbed first thing that was by his hand when he lost his shield and he wielded and fought until his blade found a way and orc blood splattered upon him. He stood as orcs dragged their leader into the mountain. After that they were mindless horde without tactics and they were easily forced back into the mountain. But that was a poor victory. Bodies piled up around them. Old hardened warriors shed tears but Thorin's eyes were dry. He had no tears to cry out, he had only anger.
After the battle his father was nowhere to be seen. Reports were made that he wondered of into the woods looking bewildered and lost. They were too small in numbers and exposed on the mountain of their sour victory. There weren't any soldiers left to be spared in vain. Thorin was left all alone, his men were tiered, defeated and full of sorrow so he ordered a bonfire to be made so they don't leave their dead to the orcs to feed upon and they withdrew once more retreating from their enemy.
Rumours of his father were heard but it would always prove to be nothing, just whispers in the dark but he continued to look out for him when he could. For now he was needed by his people so he led them through the wilderness in search for gentler hills, for unclaimed mountain they could drill into and make it their home.
As they progressed further into the wild, away from their mountain Thorin had learned that they couldn't count on anyone but on each other. No one offered them shelter or food, weapons or tools. They were left to themselves and all they could get was what they could earn, make or even steal if nothing else was offered. It didn't take long before he had no problem with stealing, lying or running away. They owed loyalty to no one but themselves. The world was cold and indifferent place with no kindness or gentleness.