At 9.50 am, as the ARVN 1st Battalion marched through Loc Tho village they were encircled by the VC 90th Battalion, who had set up ambush positions and were waiting for the ARVN to arrive. Caught by surprise, the ARVN 1st Battalion descended into chaos and was unable to mount an effective counter-attack. In less than one hour of fighting, the battalion was completely destroyed with 270 soldiers either killed or wounded. Captain Nguyen Van Ngoc was amongst the 217 men who were captured. Only 65 ARVN soldiers and three American advisors managed to return to government lines. The VC also claimed to have destroyed one 105mm artillery piece, four GMC trucks and one Jeep. Meanwhile, the VC 83rd Local Force Battalion marched from Tra Khuc River toward Nghia Hanh, and began applying pressure on the ARVN stationed there. Thus, the VC were asserting control over Ba Gia and the surrounding areas.