In February, 1862, while a colonel on General Grant's staff on the final day of the siege of Fort Donelson, Hillyer took dictation from Grant and penned Grant's famous words, "No terms except an unconditional and immediate surrender can be accepted. I propose to move immediately on your works." The entire dispatch was written and carried by Hillyer who delivered it in person to Confederate General Buckner, commander of the fort. After the battle Colonel Hillyer and Brigadier General Lew Wallace had a falling out over Wallace's report on the battle, which claimed that Hillyer and Grant's other aides were not seen on the battlefield by Wallace or any of his aides. Hillyer denied the charge and later criticized Wallace claiming his report exaggerated the contributions of Wallace and his division, and accused him of cowardice. Wallace, however, was later exonerated of any such cowardice. In his report of the battle Hillyer and other aides were mentioned by General Grant for their gallantry and services during the battle.