Bree is the main village of Bree-land (which also contains the villages of Straddle, Combe, and Archet).
It's a place with an unusual (yet peaceful and content) mix of Big and Little Folk – i.e., men and Hobbits.
The men of Bree say that they're the oldest settlement of men in Middle-earth.
The Hobbits of Bree also agree that they're the oldest settlement of Hobbits in Middle-earth; it's from Bree-land that Hobbits moved west across the Brandywine River to settle the Shire at the beginning of the Third Age.
The Bree Folk are also proud to be the last human village this far west.
There are other western men, whom the Bree Folk call Rangers. They have strange tales and stranger manners, and they come through Bree-land every now and again.
Frodo and the Hobbits eventually reach the gate of the village of Bree.
The gatekeeper wants to know why they're here – it's not often that they get Shire-folk in Bree. Maybe there's a juicy story.
Merry gets touchy: "I am Mr. Brandybuck. Is that enough for you? The Bree-folk used to be fair-spoken to travellers, or so I heard" (1.9.16).
The gatekeeper lets them in, but he's grumpy about it.
Barliman Butterbur, the innkeeper, welcomes them to The Prancing Pony.
Seeing Hobbits from the Shire – especially one named Underhill – reminds Butterbur of something, but he can't remember what it is.
Butterbur and Nob, his Hobbit servant, show Frodo, Sam, Merry, and Pippin to their rooms.
Butterbur suggests that the Hobbits come down to the inn's public house after they've eaten. They don't get people from the Shire often, and the guests would love to talk to them.
Frodo, Pippin, and Sam go down, and Merry sets out for a walk in the fresh air.
There is a big common-room filled with people: "men of Bree, a collection of local Hobbits (sitting chattering together), a few more Dwarves, and other vague figures difficult to make out away in the shadows and corners" (1.9.44).
Frodo has to make up a story for why he's traveling from the Shire: he says he's researching a book on the Hobbits of the eastern lands. Quick thinking.
The men and Dwarves in the room are discussing recent world events: they know that there is trouble in the South.
A "squint-eyed ill-favoured fellow" (1.9.48) predicts that there will be a lot of refugees coming from the South to the North, and they'll need to find space for them.
Frodo notices a travel-stained, weather-beaten man in a hood watching the Hobbits closely. He asks Butterbur who this is.
Butterbur doesn't know his name. The man is a Ranger, and he is known in Bree as Strider.
Strider notices that Frodo has seen him, so he waves Frodo over.
He says that he is pleased to meet "Master – Underhill, if old Butterbur got your name right" (1.9.54).
As Strider and Frodo talk, Frodo notices that Pippin is telling the story of Bilbo's disappearance at the end of his birthday party.
Frodo worries that this story will bring to mind the Baggins name.
He also realizes that Pippin has gotten carried away with the attention and has forgotten the danger they're in.
Strider whispers, "You had better do something quick!" (1.9.60).
Frodo stands up and awkwardly announces that he wants to encourage ties between the Shire and Bree; then, surprise surprise, he bursts into song.
Frodo's voice is good, and the song he chooses is about a merry inn; the whole crowd enjoys it hugely.
They give Frodo more alcohol and demand an encore.
He performs happily, but when he attempts to mimic the jump of the cow over the moon in the song, he hits a table full of mugs and then disappears.
The whole crowd is totally astonished and starts shouting for Butterbur.
The "squinty-eyed southerner" (1.9.67) and a "swarthy Bree-lander" (1.9.67) start talking together and walk out of the inn. Harry, the Bree gatekeeper, walks out after them.
Frodo is so shaken by this accident that he crawls under the tables to Strider.
Strider asks Frodo what he was thinking – disappearing like that was worse than anything his friends could have said.
A local Hobbit (Mr. Mugwort) complains to Butterbur that Frodo just disappeared into thin air.
Frodo walks over and claims that there's no big mystery: he was just having a word with Strider in the corner.
No one seems too satisfied with Frodo's explanation.
Butterbur doesn't seem too upset, but he tells Frodo he should keep his magic tricks to himself.
Strider asks Frodo for a quick word. Frodo agrees, but he's feeling apprehensive.