At last the sword is shaped and sharpened. Siegfried swings it before him:
"Nothung, Nothung, conquering sword; again to life have I woke thee! Strike at the traitor, cut down the knave! See, Mime, thou smith; so sunders Siegfried's sword!" and he strikes the anvil in twain from top to bottom. It falls asunder with a great noise, and the dwarf drops with terror to the ground.
The scene changes to the forest in front of Fafner's cave. Alberich is watching gloomily by, and the Wanderer rides in to taunt him with false hope of the Ring.
"A hero nears to set free the hoard," says the Wanderer. "Fafner will fall. Perchance if Alberich warn the dragon, he may win the Ring in token of gratitude."
Alberich makes the approaches. Fafner yawns: "I have and I hold; let me slumber!"
With scornful laughter the Wanderer rides away. But "one day," snarls Alberich,—"one day shall I see you all fade, ye light-hearted eternals. The wise one keepeth his watch and surely worketh his spite!"
As the day breaks Siegfried and Mime enter, Siegfried wearing his sword hung in a girdle of rope, and blithely blowing a horn. Fafner, in the shape of a huge lizardlike dragon, comes out of his cave and forward to the stream for water. At sight of the nonchalant youth piping his wood-notes gay, the monster emits a snort that serves his need of a laugh,—"I came for drink; now, too, I find food."
The conflict is speedily joined. More than once Siegfried is well-nigh lost; but his chance comes. The dragon exposes his heart, and Siegfried sinks his sword into it up to the hilt. In the moment of death, Fafner warns the young hero to beware of him who stirred him to the fight. But Siegfried pays little heed. The blood of the dragon bespatters his hand; it burns. Siegfried involuntarily carries his hand to his lips. There is a wood bird singing. Siegfried regards him with astonishment. "Almost," he says, "it seems as wood birds were speaking to me," and he hearkens.
"Hei!" sings the wood bird; "now Siegfried owns all the Nibelung's hoard. Let him but search the cavern, and hoard, Tarnhelm, and Ring will make him the lord of the world!"