The non-hydrostatic version of the mountain flow theory presented in Part I is detailed. In the near neutral case, the surface pressure decreases when the flow crosses the mountain to balance an increase in surface friction along the ground. This produces a form drag which can be predicted qualitatively. When stratification increases, internal waves start to control the dynamics and the drag is due to upward propagating mountain waves as in part I. The reflected waves nevertheless add complexity to the transition. First, when stability increases, upward propagating waves and reflected waves interact destructively and low drag states occur. When stability increases further, the interaction becomes constructive and high drag state are reached. In very stable cases the reflected waves do not affect the drag much. Although the drag gives a reasonable estimate of the Reynolds stress, its sign and vertical profile are profoundly affected by stability. In the near neutral case the Reynolds stress in the flow is positive, with maximum around the top of the inner layer, decelerating the large-scale flow in the inner layer and accelerating it above. In the more stable cases, on the contrary, the large-scale flow above the inner layer is decelerated as expected for dissipated mountain waves. The structure of the flow around the mountain is also strongly affected by stability: it is characterized by non separated sheltering in the near neutral cases, by upstream blocking in the very stable case, and at intermediate stability by the presence of a strong but isolated wave crest immediately downstream of the ridge.