En route to Worms, Siegfried encounters and slays a nameless dragon, for no apparent good reason. Tipped off by an obviously stuffed bird, after tasting the dragon's blood, he bathes in its blood in order to make his body impervious to swords and arrows. Unfortunately, a leaf, flipped up by the dragon's tail, lands on his upper back, stopping the dragon's blood reaching him there. His back under the leaf is therefore made vulnerable, and somehow everyone will know this. Siegfried also encounters Alberich (Georg John), the dwarf Lord Treasurer to the Nibelungs. He takes a magic helmet from Alberich, that can make him invisible and extra strong; then he captures the Nibelung treasure hoard and the enchanted sword.

Upon arrival at the castle of King Gunther, Siegfried is opposed by the warrior Hagan (Hands Adalbert von Schlettow), half-brother of Gunter. Hagan is jealous of the young and handsome Siegfried who seeks the hand of the beautiful Kriemhild. This maiden had previously vowed to marry no warrior. She subsequently foresees Siegfried's death in a dream, during which a white dove is attacked by a pair of black hawks.

In order to obtain the hand of Kriemhild in marriage, Siegfried must assist Gunther in likewise obtaining the hand of Brunhild (Hanna Ralph), warrior queen of Iceland. Brunhild has pledged that she will only marry a warrior who can defeat her in a series of athletic games - these involve throwing a large spear, throwing a heavy rock, and leaping through the air. Upon arrival at Brunhild's castle, Siegfried assists Gunter in defeating Brunhild by donning the cloak of invisibility and utilizing his special strength.

Upon the party's return to Worms, Brunhild weds Gunther, and Siegfried takes Kriemhild. However, during an encounter on the steps of Worms cathedral between the two women, Brunhild learns how Siegfried and Gunther had deceived her into giving up her kingdom. She calls on Siegfried to be killed in revenge. Gunther agrees and together with Hagan tricks Kriemhild into making a garment that marks Siegfried's vulnerable spot. Hagan then spears the young hero in the back and kills him. With the death of Siegfried, Brunhild becomes remorseful and apparently commits suicide. Kriemhild wants revenge on Gunter and Hagan.