Mime has set up a metal forge in a deserted area near the spot where a transformed Fafner guards the treasure. Siegfried demands a sword from Mime, but every weapon the Nibelung forges is easily shattered by Siegfried. Commanding Mime to reforge the fragments of a sword purportedly left to Siegfried by his deceased mother, the young man learns more from Mime about his heritage. Wotan, who now wanders the world incognito, approaches Mime and challenges him to a battle of wits, proposing that they each pose three questions to the other. When Mime is unable to answer the final question, Wotan reveals that only a fearless person can reforge Siegfried’s sword, and that person will kill Mime. After Wotan departs, the terrified Mime resolves to teach Siegfried fear in order to save himself. But Mime faces a dilemma: if Siegfried learns fear, who will forge the sword that can kill Fafner and regain the golden hoard? When Siegfried returns to claim his sword, Mime is eager to teach the young man to fear. Siegfried, still immune to fear, successfully reforges Siegmund’s sword and goes off with Mime to reclaim the golden hoard from Fafner. Mime has brewed a poisoned drink to give Siegfried after he triumphs over Fafner.