The end of the tunnel splits off into two other tunnels, and they find the smashed cart and the mauled bodies of several duergars scattered about. Zendril's idea was a success! After they are done picking over the items on the bodies, Theranion begins leading the group down the left passage. He gets no more than few feet before nearly stepping into a gelatinous cube.

He stops short of the cube just a few inches from its creeping surface. With a sudden lump in his throat, he quickly backs away, then lets loose a fire spell. The rest of the party follows suit, destroying the creature from a safe distance. Still a little shaken, Theranion decides it might be best to go down the right passage instead. One can never be too careful...

As they venture deeper into the mines, they come across several groups of duergar dwarves ready to hack the party to pieces. These first few enemies pose little problem, and the group continues forward. The group is feeling rather confident at this point, until Zendril accidentally steps on a tripwire, causing a spike-filled slab of wood to swing down from the ceiling at the group - a duergar trap. They escape with only a few scratches, but are suddenly much more cautious from this point forward.

A little while later, they enter a carved room dominated by a large pit. In the pit are two rust monsters, "pets" of the duergar. Several duergar sneak up behind the group and attempt to rush them and knock them into the pit. Quick thinking by the group thwarts the duergars' attempt, and two of the duergar end up falling into the pit themselves. The rest are quickly dispatched.

Further down the passageway, the group enters a large mined-out cavern, which once served as the hub of the dwarves' old mining operations. A large force of two dozen derro dwarves ambushes the group, firing crossbows at them from all directions. They are forced to retreat back to the pit area, where they ready themselves for battle from a more defensible position.

As the main force of the derro chase the group through the tunnel, a smaller force heads down another set of tunnels to box them in at the pit. As hoped, the pit area proves to be an excellent defensive area. During the battle, Zendril comes within a hair's breadth of losing his life to the derro onslaught. Theranion manages to trip several of the derro into the pit with his staff, and Nataya charges at the group of derros attacking Zendril, giving him the chance to retreat behind the front lines.

When the battle was over, the group emerges victorious, but in very bad shape. Theranion has nearly exhausted all his memorized spells, and Nataya uses the last of her healing spells on a severely injured Zendril. When they make it back into the large cavern where they were ambushed, they discover one of the derros' prisoners, bound and gagged in a small alcove.

The dwarf introduces himself as Drommel Skullhammer, one of Graylin's former followers. Drommel admits to helping Graylin plan the theft of the axe, but insists he knew nothing of the duergars' and derros' involvement or the death of the guards until it was too late. Graylin had him bound and dragged down to the derro encampment, with plans to use him and a few others as an offering to the derro in exchange for their help with a summoning and resurrection spell.

Attempting to atone for his actions, Drommel hesitantly informs the party of Graylin's true plans. Four hundred years ago, Thorlin defeated an ancient red wyrm using the very axe that Graylin has stolen. Thorlin's axe is the only weapon ever known to penetrate the wyrm's thick scales, and in Graylin's communications with the dragons' spirit, has learned it would like nothing better than to see the axe destroyed. Graylin now plans to resurrect the ancient wyrm, and offer up the axe as a sacrifice in order to curry the wyrm's favor in his schemes. If this happens, the dwarven settlements in the area would be powerless against Graylin and his allies...