First we clarify the extension of the main result of [11] to knots in solid tori that is described in the Appendix of [11]. In Section 3, we define a family of hyperbolic knots J " .`; m/ in a solid torus, " 2 f1; 2g and`; m integers, each of which admits a half-integer surgery yielding a toroidal manifold. (The knots J " .`; m/ in the solid torus are the analogs of the knots k.`; m; n; p/ in the 3-sphere.) We then use [11] to show that these are the only such:Theorem 4.2 Let J be a knot in a solid torus whose exterior is irreducible and atoroidal. Let be the meridian of J and suppose that J. / contains an essential torus for some with . ; / 2. Then . ; / D 2 and J D J " .`; m/ for some ";`; m.This theorem along with the main result of [11] then allows us to describe in Theorem 5.2 the relationship between the torus decomposition of the exterior of a knot K in S 3 and the torus decompositon of any non-integral surgery on K . In particular, Theorem 5.2 says that the canonical tori of the exterior of K and of the Dehn surgery will be the same unless K is a cable knot (in which case an essential torus of the knot exterior can become compressible), or K is a k.`; m; n; p/, or K is a satellite with pattern J " .`; m/ (in the latter cases a new essential torus is created).We apply these theorems about non-integral Dehn surgeries to address questions about unknotting number. The knots k.`;m;n;p/ (J " .`; m/) are strongly invertible. Their quotients under the involutions give rise to EM-knots, K.`;m;n;p/ (EM-tangles, A " .`; m/ resp.) which have essential Conway spheres and yet can be unknotted (trivialized, resp.) by a single crossing change. Theorem 6.2 descibes when a knot with an essential Conway sphere or 2-torus can have unknotting number 1. This is naturally stated in the context of the characteristic decomposition of a knot along