Along the way, they stop off at Dagger Falls to purchase supplies and find better equipment. As local heroes to this small town, their arrival does not go unnoticed. Zendril, looking for the chance to earn more cash, finds his way to Randal Morn's office. It turns out that the newly restored ruler needs someone to perform a diplomatic task for him, and Zendril volunteers for the job.

Randal needs to send an emissary to the dwarven mines of Tethyamar, in the hopes of reinstating trade with the dwarves who have returned to the area. The problem is, Randal's grandfather was responsible for driving the dwarves from the Dagger Falls area in the first place, and the dwarves have vowed to have nothing to do with the dale as long as a member of the Morn family sits on the throne.

Because of the enmity between the dwarven Bladebright clan and the house of Morn, Randal suggests that Zendril and the rest of the group conduct their own business with the dwarves first, before attempting to broach the subject of Dagger Falls with the dwarves. Randal wants to correct the evils his family has visited upon the area, providing whatever restitution he can to the Bladebright clan. His hope is that the dwarves would at least be willing to give him the chance to make amends.

With a new mission in hand, they head out to the Dragonsmouth Mountains, but without their drow member, Silver. The dwarves have a hard enough time tolerating elves, let alone a drow. Silver ends up staying behind in Dagger Falls, where he bides his time by putting his merchant skills to good use.

Upon arriving at the mines of Tethyamar, the group discovers an unexpected boon. During an earlier adventure, they rescued a group of dwarves that were about to be transported to the Underdark as slaves for the Drow. It turns out that most of those dwarves were from the clan that now occupies the Tethyamar mines. The grateful dwarves did not have the opportunity to properly thank them earlier, and so offer to repair the group's keep for half the normal cost.

The leader of the dwarven clan, Mordran Battleaxe, also sees in the group an opportunity to help the dwarves solve a recent development. Just two days before the group arrived, there was an attack on the clan's "Hall of Thorlin", where the weapons and armor of their greatest heroes are on reverent display. The guards on duty were overwhelmed and killed, and the axe of Thorlin Broadblade, their greatest hero, was stolen. Several clues, including inspection of the broken tip of a sword, indicated that the duergar might be involved.

The clan tracked the thieves as far as the oldest portion of the mines. However, since the dwarves only just recently returned to their mines after more than a 50-year absence, most of the older parts of the mines were still overrun with monsters. With most of the clan members still scattered across the realms, the dwarves simply did not have enough manpower to risk entering that part of the mines.

Thorlin's axe is extremely important to the clan's heritage, so just abandoning it to the thieves is not an option. While Mordran does not wish to risk the lives of his all-too-few clan members, he has no issues with letting the group try to retrieve the axe from the thieves that stole it.

To complicate matters, the clan's high priest, Graylin Twinaxes, was missing. Graylin was the type who was always looking for fight, and was constantly challenging the authority of the peace-loving clan leader. Mordran suspects the theft and Graylin's disappearance are related, but what Graylin wants with the axe is still a mystery. Mordran asks the group to find Graylin, and return the axe to its rightful place with the clan. He offers to repair their keep free of charge if they succeed. They agree, and prepare to enter the old mines...