Book II, Chapter 5: "The Bridge of Khazad-Dûm"
At the Tomb of Balin, in Moria's Chamber of Records, the Fellowship discovers a book recording battle between Dwarves and Orcs. No sooner has Gandalf finished reading aloud the account than Orcs attack the company. An Orc chieftain stabs Frodo with his spear, and Frodo's companions fear the Hobbit is dead. He is protected, of course, by the mithril coat, of which the others know nothing. The Fellowship runs for the high and narrow bridge beyond which lie the gates that lead out of Moria, only to encounter a Balrog: "a great shadow, in the middle of which was a dark form, of man-shape maybe, yet greater; and a power and terror seemed to be in it and to go before it."

Gandalf defends the bridge while the members of the Fellowship cross, fighting the fiery Balrog in sword to sword combat, even breaking the bridge with his staff in order to send the Balrog down to the mines' depths. Yet the Balrog, using its whip, drags Gandalf down with it. Confused and grief-stricken, the survivors follow Aragorn out of Moria.