A little hobbit called Bilbo Baggins is having a 111th birthday party, and during a farewell speech he does a little magical vanishing act. A local wizard called Gandalf the Grey interrogates him as something seems strange about it all - and discovers the source to be a magical ring. Quickly doing his homework, he finds out that many years ago all the Elf Kings, Human Kings and Dwarfs were given rings of power, but the bad dude Sauron made his own ring that superceded them all.  In time he controlled most of this 'Middle Earth' until everyone ganged up on him and cut off his hand, stealing his ring.
  The ring changes men's hearts for the worse, and rather than have it destroyed it was lost for many years.  In this time Sauron has been growing in strength, and now he wants his ring back.
  The ring is entrusted to Bilbo's nephew Frodo (Elijah Wood) and with some friends he needs to take it away to the local Elf city -- but a bunch of mysterious dark riders will not make the journey an easy one.

While walking through the forest with 'the Fellowship', Boromir (Sean Bean's character) turns nasty and tries to steal the ring from Frodo.  Frodo needs to wear it to escape - and alerts all of the bad guy's orc minions to their whereabouts.
  Everyone gets involved in the massive fight - except Gandalf who was pulled into a bottomless pit by a fiery demon just before - and the intellectually-challenged orcs take away the wrong hobbits to their master.  The fact neither of them were wearing rings should have given it away.  Boromir turns good in the end, but a few arrows slammed into his chest soon takes him out.
  Frodo gets into a boat to make his escape, but his best mate Sam (Sean Astin from The Goonies) won't let him get away.  He can't swim, so needs to be rescued. Together they set sail for the other side of the river, and to carry on their doomed journey to Mordor.
  Aragon, Legolas the Elf and the angry Dwarf are gutted that they have been left behind, but decide to chase after the orcs and rescue the other two hobbits before they become a side-dish for lunch.