'No Dwarf of Erebor would do such a thing as steal that necklace. Not a one! But I couldn't vouch for those Stout-axes. Could you?'

You tell Fróthi that you saw Karazgar holding a dragon's tooth.

'Then we know our thief! I am relieved that I need not think poorly of our cousin-dwarves. We know our thief, and how formidable a foe he is, but we do know little of what he is after.'

You should speak with the lore-master Fróthi, who can be found in Erebor.

Objectives

• Talk to Fróthi