Ghared interrogates the captive party. She demands to know why they are here and who they are working for. Were they hired by the hobgoblins? She expresses some grudging respect for their battle prowess, and recognizes that they have some skills she can use to her advantage. She exacts a toll from them and then hatches a plan. She offers to let the party return where they came from, or she can show them on their way to the north chambers of the complex, which she asserts are haunted. But she has a proposition for them that they may find more profitable. Her Duergar tribe has a demanding “landlady” to whom they owe payment. The “customers” in their sword-making business, Ulfe’s hobgoblin tribe, are late in payment. Frankly she thinks that with the help of the party, they can do away with the landlady, and retain payment from the hobgoblins. Then they can re-invest in their sword-making efforts, rather than stay just barely ahead of the rent demands. The party would be welcome to the landlady’s present hoard of loot, and the Duergar would be free of their constant need to pay “rent.”

The party agrees to this. In exchange for their freedom, and for a chance to earn some loot, they will attempt to bring down this landlady. It turns out the landlady is a dragon… but a young one. Ghared thinks that with the help of a couple of her toughest guards, the party can beat the dragon. She allows them to retrieve their weapons and then leads them into the Foundry.

There, they find a couple of swordsmiths at work, under the supervision of one who is introduced as Snurrevin. Ghared is clearly not above board in this scheme, as she blatantly lies to the Snurrevin. She passes the four off as a delegation of potential new customers, ones who have greater resources than the hobgoblins. She is taking them on a tour of the operations. Snurrevin is initially puzzled by this, but he finds the promise of greater resources appealing, and he quickly becomes very solicitous, eager to convince these new prospects of the quality of their wares, and the great opportunity to soon begin manufacturing weapons to rival those of the famous Durgeddin weapons.

Ghared is eager to cut this conversation short. She excuses herself and her guests and takes them on the next leg of the “tour.” She brings them to the east end of the cavern as Snurrevin and his bladesmiths return to their tasks. The roar of a thunderous waterfall grows louder as they approach a deep chasm over which the river pours, throwing up a plume of mist. Ghared brings them near the precipice and gestures to a stone shelf across the way. There, they see a rusty metal ladder descending into the depths. She tells them that here they toss their “rent” over the side, but she knows that there is a long way around to the opposite shelf, to access the ladder. That route would take them through “haunted” areas of the complex. She will send two of her guards with them as guides and combat support. Cycek has an alternate idea to get to the ladder. He ties one end of a rope to his belt, and another end to the handle of one of the unused forges. He takes a running start and leaps out over the chasm. His trajectory carries him across the gap, and the arc of his fall allows him to grab the ladder about 20 feet down. He climbs back to the top and secures the other end of the rope to the ladder, creating the means for the rest of the group to cross over.

The first to attempt the crossing is one of Ghared’s guards. His climbing skill proves to be less than his confidence and he loses his grip on the wet rope. With a yell, he falls into the darkness. Sartan decides to go next, wisely tying himself to the rope, and ensuring that his passage is safe. Next, Davros, who was not paying attention, foolishly attempts to climb across without any such safeguards. He slips from the rope and plummets into the chasm, to almost certain death. Sartan shakes his head, sighs, and says, “What an idiot.”

The rest of the party learn the lesson and make sure they are tied off before proceeding. They all make it across and then climb 120 feet down alongside the waterfall, to a lower cavern where the water thunders into a pool. Just downstream, they find the unconscious forms of Davros and the Duergar guard washed up on a gravel shoal. Remarkably, both are still breathing. Mishok administers a healing spell and brings both fallen idiots back to their feet.

The waterfall feeds a stream that flows northward to join another river emerging from the east. The combined waters flow swiftly westward. The group follows a path through the cavern, crossing a sturdy dwarven-made bridge of stone along the way. It becomes apparent that the river is flowing from a subterranean lake to the east. They proceed across another bridge, but in their eagerness, they fail to notice that this one is not structurally sound. It collapses under their weight and Mishok is cast into the rapids. Luckily, although bruised, he manages to cling to the rocks and haul himself from the current.

Crossing the broken bridge requires athletic leaps by each of the party members, but before long they are reassembled on the opposite side. The path narrows and hugs the shore of a still, dark pond. This requires the explorers to move along it in single file. Cycek leads the way, and he can see an island far out in the lake, although the far side of the cavern is lost in darkness, even to his keen elven dark vision. Despite the unclean appearance of the water, Cycek notices a dark shape moving in the depths, not far from shore. It soon resolves to a large, reptilian form. Before they can move to safety, a black, serpentine neck emerges from the dark waters, and a wicked, draconian face leers down at them. It is the dragon, Nightscale.