Answer:
What can be underwater, under fire, on fire and taking water all at the same time?
Two little holes in the side of a hill. Just as you come to the cherry-red mill.
It can pierce the best armor and make swords crumble with a rub, yet for all its power It can't harm a wooden club.
What is that over the head and under the hat?
What's as small as a mouse but guards a house like a lion?
People take me on walks and I run and have fun. What am I?