He tells them that they should wait in the tunnel and that he will creep back to the dragon's lair later to see if the beast has a weak spot. They accept his offer. At noon, he goes into the tunnel and moves silently after putting on his ring. He sees that the dragon is sleeping and thinks that he is safe. When Bilbo steps into the room, the dragon's eyes snap open.
Dragons know how to sleep lightly when they are expecting company.
Smaug tells the thief to come out because he cannot see Bilbo. Bilbo speaks and tells him that he only came to look on the impressive size of such a great dragon. Bilbo remembers, from tales he heard from his father, that dragons love flattery. He praises the beast, and Smaug tells him he has nice manners for a thief. He asks Bilbo who he is and where he is from.