When Frodo awakes he is in the house of Elrond at Rivendell. Gandalf is there. Elrond has called a council meeting to discuss what must happen. Gandalf tells Frodo that Strider is also called Aragorn, Man of the West, and that the Black Riders are also known as Ringwraiths or the nine servants of the Lord of the Rings. .
Frodo learns that for the past four days and three nights he has been delirious. Elrond, a master healer, has been at work trying to save Frodo. The rider who had wounded Frodo did so with a Morgul-knife, of which a piece was embedded in Frodo's body. That piece had worked its way toward his heart, but Elrond had removed it. If the fragment had reached Frodo's heart he would have become like the Riders, a servant to Sauron. The Ring would have been taken from him, which would have proved torturous to Frodo.
Frodo learns about all those who work for the Dark Lord. The men are made of nothing, and wear robs to give shapes to their otherwise shapeless existences. The horses, just like many orcs, trolls, kings and men, have been brought up under the Dark Lord's power and are in his service forever. Gandalf tells Frodo that the white figure he saw at the river was Glorfindel and that the river itself was commanded by Elrond.
After they have eaten they go to the hall of fire. To his delight, Frodo discovers Bilbo is living there among the others. Bilbo tells Frodo what he has been up to and asks to see the Ring. When Frodo produces it, Bilbo at once asks him to put it away, fearful of the way he as responded to it. Strider returns and Frodo discovers that he is also called Dinadan.
The most delightful surprise in this chapter is the appearance of Bilbo, who was the only family Frodo had known, and who is responsible for Frodo's life and present situation. Bilbo's curiosity about the Ring is mysterious and compelling, as is his immediate request that Frodo put it away. Once again, the Ring has palpable power.
Somehow representatives from all the major groups living in Middle-earth have all made their way to Rivendell on separate matters of business. Each is called to the council to represent their faction, however, concerning the Ring of Power and the threat of invasion by Sauron and the Black Riders. Frodo is introduced to elves, dwarves, men, and others of his own hobbit race that he does not know.
Elrond addresses the subject of the Ring. It seems that Sauron has declared war unless he recovers the Ring. Boromir, the high steward of Gondor, has had a dream about the Ring. In the dream, he is instructed to find the Ring, a halfling and a broken sword. Strider produces the broken sword--the one Frodo has been using. Frodo produces the Ring. And Frodo himself is the halfling. All these things reveal that Strider, or Aragorn, is the rightful heir to the throne of Gondor. Boromir and his people vow to fight Sauron.
Bilbo stands up to tell everyone how he took the Ring from Gollum. Gandalf joins in to explain how Gollum himself came to possess the ring and how it has changed him and Sauron. In the past, Gandalf 's search for knowledge has led him to many records written in the past which explain the history of the Ring and ways to recognize it.
Gandalf tells them how he captured Gollum and gave him to the elves for safekeeping. But an elf named Legolas announces that Gollum has escaped. Gandalf goes on to tell how he himself has been held captive by Sarumon, a chief wizard of his order. Unfortunately, Sarumon himself has been seduced by power. He wants the Ring and will do just about anything to get it. When Gandalf refused to tell Sarumon the whereabouts of the Ring, he was imprisoned. But an eagle saved him and that is how he came to be at Rivendell with Frodo and his companions.
The council discusses many ways of dealing with the Ring, but none seem satisfactory. Eventually they decide the best course is to let Frodo continue with his journey.
In this chapter, Tolkien has set out the history of the Ring and how it has affected Middle-earth. Though the ring has enormous influence, it remains essentially unchanged.
Another important aspect of this chapter is the concept of greater good. The council realizes that the task they must complete is dangerous and difficult, but the good of everyone is affected and so they press onward.