Kriemhild, FOR SOME REASON, has a sense of forboding about this hunting trip, and begs Siegfried not to go. He goes anyway.
Siegfried cheerfully slaughters furry woodland creatures, and finally winds up capturing a bear, which he takes back to entertain them at the feast (PETA would not be amused). Siegfried lets the bear go, and all hell breaks loose. Siegfried kills the bear too.
Now, as yet another part of this convoluted plan of Hagen's (Doctor Evil would have difficulty besting him), the wine was left behind in Worms. To quench their thirst, the hunters must drink from a stream nearby. Hagen challenges Siegfried to a race to get to this stream (another part of his evil plan). They take off their armour and weapons (aha!) and race, Siegfried winning, of course.
Hagen hides Siegfried's sword and arrows, and then takes up his spear while Siegfried is drinking, and stabs him through that useful little cross Kriemhild had sewn on his tunic.
Siegfried, feeling the spear sink into his back, stands with the thing sticking out of him, and strikes Hagen a mighty blow with his shield. As Siegfried dies, there is a dialogue of Shakesperian proportions: "a plague on both your houses", "tell Kriemhild I love her", "don't. . .forget.. . my.. . story" etc etc etc.
The heroic knights decide to cover up the murder, and bring the body back to Worms.