Hermione shoots a painful curse at Harry's face that makes it swell. Someone jerks him up and others, including Fenrir Greyback, restrain Ron and Hermione. Harry tells Greyback that his name is Vernon Dudley. Ron admits that he's a Weasley, while Hermione says she's Penelope Clearwater. Ron says they used Voldemort's name on accident. The Snatchers tie the trio up with a few others, including Griphook and Dean. Greyback kneels in front of Harry to ask about Harry's fake name. Harry says he's in Slytherin and is able to tell Greyback about the Slytherin common room and that his dad works at the Ministry. A Snatcher finds the sword in the tent and a copy of the Daily Prophet.
Fenrir Greyback, a werewolf, makes this situation even more dangerous, given that he has the power to turn any of his captives into a werewolf, thereby damning them to a life in which they're marginalized and feared. In other words, Greyback threatens them with expulsion from their community in addition to threatening them with being hauled in front of Voldemort.
Harry's scar burns and he finds himself approaching a towering building as Voldemort. Harry pulls his mind back to his reality and hears the Death Eater discover Hermione's identity thanks to a photo in the Prophet. Greyback turns to Harry and touches Harry's scar, which burns with pain. The Snatchers stand back in awe as Harry fights to stay in his mind while Voldemort flies to the top of the tower. Greyback decides to take his captives to Malfoy Manor directly as Harry sees Voldemort force himself into the room. Harry is relieved that Voldemort isn't at the Malfoys' as Greyback marches them up the walk. He sees the man in the tower room tell Voldemort that he never had the wand.
Though Harry never confirms, the man in the tower room is Grindelwald in prison; Voldemort is there hoping to steal the Elder Wand. By switching back and forth between these two different realities, the reader is able to get the sense that while Harry may be lacking in physical power, he's still able to acquire information that will ultimately be useful—though he has to deal with the fact that Voldemort is getting the same information and can also choose to use it.
Narcissa Malfoy opens the door and, though she's skeptical, she accepts Greyback and his prisoners. She says that Draco is home and can identify Harry. In the sitting room, Lucius excitedly encourages Draco. Harry and Draco refuse to meet eyes, though Harry catches sight of his own reflection in a mirror and thinks that he doesn't look like himself. Draco grudgingly admits that the other captives might be Hermione and Ron as Bellatrix enters and starts to call Voldemort. She stops when she catches sight of the sword, Stuns four of the Snatchers, and towers over Greyback. She says the sword should be in her vault at Gringotts and shrieks that they're in grave danger until they figure out where the trio found it.
Draco's refusal to look at Harry suggests that he's having second thoughts about his involvement with the Death Eaters, something that offers him the opportunity to later choose to repent and change his life for the better. Bellatrix's reaction to discovering the sword suggests that there is someone at Hogwarts (where the sword was) who's on Harry's side, which should tell Harry that Hogwarts isn't as hostile of a place to him as he thinks it is with Snape in charge.
Bellatrix shrieks for every captive but Hermione to be put in the cellar and cuts Hermione loose. Greyback forces Harry, Ron, Griphook, and Dean into the cellar as Hermione screams. Ron shouts until they hear Luna in the cellar with them. Luna unties them with a nail after using Ron's Deluminator to give them light. Harry sees Ollivander in the corner and notices that Griphook is barely conscious. Upstairs, Bellatrix interrogates Hermione about the sword and performs the Cruciatus Curse on her. Harry starts pulling things out of his moleskin bag and sees Dumbledore's eye in the mirror. He asks for help and says they're at Malfoy manor. Hermione sobs that the sword is a copy and Bellatrix sends for Griphook to confirm this. Harry asks Griphook to say that the sword is a fake.
In addition to saving their own skins, telling Bellatrix that the sword is a fake also protects the secret helper who seems to be at Hogwarts. Trusting that this person is truly on their side and is worth protecting shows that Hermione is able to trust in her community, even at a point in time when she's being tortured and certainly doesn't have all of her wits about her. Asking Griphook for help shows that Harry also understands the importance of reaching out to others in the community, as Griphook, remember, isn't on Voldemort's side at all and could therefore be a great ally.
After Draco retrieves Griphook and closes the door, Dobby Apparates into the cellar and whispers that he's here to rescue Harry. Harry and Ron ask Dobby to take Ollivander, Dean, and Luna to Bill and Fleur's and then come back. Harry sees the man in the tower tell Voldemort to kill him and say that there's a lot Voldemort doesn't understand. Lucius hears Dobby Disapparate and sends Wormtail to check on the prisoners. Harry and Ron tackle him as soon as he opens the door. Wormtail starts to choke Harry and Ron imitates Wormtail and calls out that everything is fine. Harry reminds Wormtail that he owes him, and Wormtail lets go. Wormtail's silver hand begins to choke his own throat and he dies.
Remember that, in the third novel, Harry chose to not kill Wormtail, even knowing that Wormtail betrayed his parents. In the present, Wormtail seems bound by a deeper and different magic than his loyalty to Voldemort might suggest, just as Harry was protected by his mother's sacrifice. This continues to show how powerful love and mercy can be, as they can very literally make it so a person is able to survive.
Harry and Ron run upstairs and see Griphook identify the sword as a fake. Bellatrix calls Voldemort and Harry's scar burns. Voldemort kills the man in the tower as Bellatrix tells Greyback he can have Hermione. Ron races in, Disarms Bellatrix, and Bellatrix threatens to stab Hermione with her knife. Ron and Harry drop their wands, which Draco retrieves. They hear a strange noise as the chandelier drops down on Hermione and Griphook. Harry wrestles back the wands as Dobby reprimands Narcissa and Bellatrix. Harry throws Ron a wand, grabs Griphook and Dobby, and Disapparates. Dobby's hand jerks as they travel. When they arrive, Harry sees Bellatrix's knife in Dobby's chest. He screams for help as Dobby dies in his arms.
Dobby's death impresses upon Harry again that, although he's the chosen one and has a lot of work to do as he fights Voldemort, his friends and wider community will also suffer and, in some cases, die so that he can achieve his goals and make life better for everyone. While Dobby's sacrifice doesn't have the same magical heft as Wormtail's hesitation or Lily's sacrifice, this does impress upon Harry the importance of doing whatever needs to be done to support his community and, in the future, advocate for elves like Dobby and Kreacher.