Wotan approaching, warns him that Alberich's brother Mime has brought up the boy, who is to slay Fafner, in the hope of gaining Alberich's ring, the wondrous qualities of which are unknown to Siegfried.
Wotan awakes Fafner, the dragon, telling him that his slayer is coming.
Mime, who has led Siegfried to this part of the forest under the pretext of teaching him fear, approaches now, and Siegfried, eager for combat, kills the dreadful worm. Accidentally tasting the blood, he all at once understands the language of the birds. They tell him to seek for the Tarnhelm and for the ring, which he finds in the cavern. Meanwhile the brothers, Alberich and Mime, quarrel over the treasure, which they hope to gain. When Siegfried returns with ring and helmet, he is again warned by the voice of a wood-bird, not to trust in Mime. Having tasted the dragon's blood, Siegfried is enabled to probe Mime's innermost thoughts, and so he learns that Mime means to poison him, in order to obtain the treasure. He then kills the traitor with a single stroke.—Stretching himself under the linden-tree to repose after that day's hard work, he again hears the voice of the wood-bird, which tells him of a glorious bride, sleeping on a rock surrounded by fire; and flying before him, the bird shows Siegfried the way to the spot.
In the third scene we find Wotan once more awakening Erda, to seek her counsel as to how best to avert the doom, which he sees coming, but she is less wise than he and so he decides to let fate have its course. When he sees Siegfried coming, he for the last time tries to oppose him by barring the way to Brünnhilde, but the sword Nothung splits the god's spear. Seeing that his power avails him nothing he retires to Walhalla, there to await the "Dusk of the Gods".
Siegfried plunges through the fire, awakes the Walkyrie and after a long resistance, wins the proud virgin.