This song is a parody of "Bound 2", the outro of Kanye West's most recent album "Yeezus" as well as referencing the plot to the movie The Hobbit: The Desolation of Smaug
During the song, Kanye raps about how his fiancee Kim Kardashian is not a hobbit, which is something he had been trying to prove throughout the episode.
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Oh yeah, babe. Oh yeah, baby.
One thing I know, my girl ain't no hobbit.
She might be stumpy; that don't mean she a hobbit.
She's not a hobbit 'cause she couldn't be.
She got no Bagginses in her family tree.
Yes on occasion she hangs out with her dwarf friends.
But she never went on no quest with her dwarf friends.
Except for one time she went to kill that dragon.
She took his gold and she-
Hang on a minute, I'm sorry, I'm sorry.[calls up Kim yet again] Bitch, remember when you went off to kill that dragon with them dwarves?... Yeah. Oh yeah. Rightrightrightright, yup. Yup, I got it. Yep, love you too. [blows two quick kisses at the phone, hangs up, and resumes the shoot.]
It wasn't no dragon, so my girl ain't no hobbit.
That was a Quizno's and my bitch went to rob it.
'Cause they got that ham that she rubs on her cellulite.
While she drinking her grog and singin' those merry songs... at night...
My girl ain't no hobbit.
Please God, tell me I'm not engaged to no hobbit.
Kim is not a hobbit.