Biological systems are characterized by compartmentalization from the subcellular to the tissue level, and thus reactions in small volumes are ubiquitous in living systems. Under such conditions, statistical number fluctuations, which are commonly negligible in bulk reactions, can become dominant and lead to stochastic behavior. We present here a stochastic model of protein filament formation in small volumes. We show that two principal regimes emerge for the system behavior, a small fluctuation regime close to bulk behavior and a large fluctuation regime characterized by single rare events. Our analysis shows that in both regimes the reaction lag-time scales inversely with the system volume, unlike in bulk. Finally, we use our stochastic model to connect data from small-volume microdroplet experiments of amyloid formation to bulk aggregation rates, and show that digital analysis of an ensemble of protein aggregation reactions taking place under microconfinement provides an accurate measure of the rate of primary nucleation of protein aggregates, a process that has been challenging to quantify from conventional bulk experiments.