Now the Nibelungs were a race of ugly dwarfs, who lived underground, burrowing in the depths of the earth for gold and treasure. They cared nothing for the free forest life, the sunshine, trees, and flowers, or pleasures of the chase. Like prisoners in a dungeon, they chose rather to pass their lives digging and toiling in the dark for gold, and hoarding it up with anxious care.

A vast heap of this treasure, including a magic Ring, stolen from the Mermaids of the Rhine, and a Wishing Cap of strange powers called the Tarnhelm, had fallen into the hands of Fafnir the giant, who, in order the better to guard these precious possessions, transformed himself into a huge dragon, the terror of all the country round.

Sieglinda lived a sad, lonely life in the forest. She avoided the caves where Fafnir dwelt, and as the dwarfs seldom came above ground, she saw nothing of them.

There was one, however, whom it was fated she should meet. His name was Mimi, and of all the dwarfs of the Nibelung race he was the ugliest and the meanest. Notwithstanding this, he was a very skilful blacksmith, and could also do fine work in gold, silver, and steel. Like all the Nibelungs, he had a great dislike to fresh air, so he built his forge in a cave half sunk underground, with a great chimney in the roof.

Mimi was working at his anvil one day, when he heard a deep groan outside the cave. On going out, he saw a woman with a baby in her arms lying on the ground. She was dying, and Mimi had only found her in time to hear her last words.

“Have pity!” cried poor Sieglinda (for it was she). “Thy goodness shall be rewarded. I am dying. Take this my son and bring him up. Call his name Siegfried, for one day he will be the greatest hero in the world. Keep for him this broken sword—it was Siegmund his father’s—‘Needful,’ he called it!”

Now Mimi was not a kind-hearted person, and nothing would have induced him to take care of a strange baby out of pity. But when Sieglinda said that her child was the son of the famous hero Siegmund the Volsung, and would one day himself be the greatest hero in the world, then a grand idea struck Mimi. He would bring up the boy as his own son, and when Siegfried was full-grown, he should be sent forth to kill Fafnir and win for his foster-father all the dragon’s treasure!

So Mimi answered Sieglinda in a cracked voice, which he tried to make pleasant:

“Be comforted, poor woman. I will take the child out of the kindness of my heart, and do my best for him.”

Sieglinda died with a blessing on her lips, and Mimi took the little Siegfried to dwell with him in his cave.