The Hobbit 3
Battle of Five Armies

Hobbit 2 Pooper:
Bilbo and the Dwarves enter Erebor and re-claim the Arkenstone. They fail, however, at killing Smaug, who leaves the mountain and flies off to attack Laketown. Meanwhile, Sauron imprisons Gandalf, and his evil armies depart to terrorize Middle Earth.

Hobbit 3:
Gandalf escapes his cage with help from Elrond, Galadriel and Saruman. Galdriel banishes Sauron/the Necromancer to the East.

Smaug destroys Laketown and the survivors flee to Dale; Bard is able to kill the dragon after his son retrieves the black arrow for him to shoot, which pierces the dragon's heart.

Bard and the Elf King Thranduil ask for their portions of the treasure that Thorin promised them - Bard needs capital to help the Laketown survivors rebuild and Thranduil asks only for jewels which had been stolen from the elves. Thorin, having become obsessed with the treasure, refuses to give up any of it or honor his word.

Bilbo sees that Thorin will only grow worse if he locates the Arkenstone, so Bilbo gives it to Bard and Thranduil so they can trade it to Thorin for what they are owed. This further enrages Thorin who banishes Bilbo, declares war and barricades his company inside the mountain.

Two companies of orcs march on the mountain, the elf army is already there, a dwarf army arrives and the battle begins. Thorin finally comes to his senses and breaks free of the "dragon fever / gold madness" that has gripped him. He and his company fight alongside their kin.

Radagast, Beorn and the eagles arrive to help fight the orcs.

Fili and Kili are killed by orcs; Tauriel is heartbroken. Azog and Thorin fight each other; Azog dies and Thorin later dies of his wounds, but not before he reconciles with Bilbo and admits his wrongs. All the dwarves and Bilbo mourn his death.

Legolas announces he will not return to the elf kingdom, and is counseled by his father to go north to look for the ranger they call Strider (Aragorn). Bilbo is escorted to the edge of the Shire by Gandalf; he discovers his home is being ransacked and the contents auctioned by relatives believing him to be dead.

End shot is of the aged Bilbo and his maps, getting a knock on his door from Gandalf, the opening scene of LOTR The Fellowship of the Ring.

Thanks Ellen!