After slaying Siegmund, the enraged Odin races home to punish Brunnhilde. She seeks help from her Valkyrie sisters because Sieglinde is pregnant with Siegmund's child. Hildegarde sends her to the great forest where the Giant Fafnir now sits with his golden horde and the pieces of Needful. Odin arrives in Valhalla and decides Brunnhilda's punishment. Odin takes her to Earth, there to make her mortal, to be taken by a man and grow old. She begs that only a man of worth find her, and Odin grants this last request. He then puts her to sleep and causes a ring of fire to rise around her, which only one who knows no fear can step through. Elsewhere, Sieglinde dies, giving birth to Siegfried, raised by Mime. After several years, Siegfried comes of age, and Mime shows him the broken sword Needful. Siegfried reforges the sword himself and splits the anvil and the block it rests on in one stroke. Mime then tricks Siegfried into confronting Fafnir to learn fear. In disguise, Odin arrives to view the confrontation between Alberich, Fafnir, and Siegfried.

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