Frodo wakes in a strange bed, feeling much better. Gandalf, who has been sitting with Frodo, explains that he had been imprisoned, but refuses to elaborate until Frodo is fully recovered. Gandalf also identifies the Black Riders as the Nazgûl, or Ringwraiths. Although not destroyed by the flood, they have been crippled. Frodo reunites with his companions, and he soon discovers that Bilbo lives in Elrond's house. Bilbo asks to see the Ring, but before Frodo's eyes, the old hobbit seems to transform into a nasty, greedy creature. Frodo hides the Ring away, and the moment passes.
The following day, Elrond calls a Council to decide what should be done about the Ring. First they review its history, from its forging to its loss in the Great River Anduin. Boromir, son of the Steward of Gondor, recounts his dream of Isildur's Bane, which he now learns is the Ring, and Aragorn reveals himself as Isildur's heir, the rightful king of Gondor. After Bilbo and Frodo recount their own experiences with the Ring, Gandalf rises to fill in the gap between the Ring's loss and its reappearance in Bilbo's possession. He explains how Gollum found the Ring, and that when he finally emerged to search for it, he found his way to Mordor, where he revealed the Ring's new bearer to Sauron. The Enemy immediately dispatched the Nine to search for it. Meanwhile, Gandalf went to consult Saruman the White, who attempted to convince Gandalf to ally with the Enemy, waiting patiently to overthrow him and take his place. Saruman then imprisoned Gandalf when he refused, who escaped with the help of the eagles. This betrayal shocks many, as Saruman had been their strongest ally.
