The group, augmented by a couple of Rivington Rats, hunker down in the first room leading into the jackalweres’ tunnels. They ponder their next move, and prompted to action by Templeton, decide to press forward back into the tunnels. But it is clear that the jackalweres are aware of their presence, as an arrow attack from the overhead slit injures one of the Rats as they pass by. Moving deeper into the tunnel, they find bodies of the slain lying where the left them following their earlier skirmish. Lis takes the form of one of them, and leads the exploration. The others string out behind him, making sure no one follows. As Lis comes around a bend into a small den, a scimitar-wielding jackalwere lurches forward to attack, and then checks itself. It sniffs the air, and says… “Olaf… that you?” Lis replies in the affirmative, and suggests that their enemies are outside, and they should go defend their leader. The jackalwere is deceived and turns to lead “Olaf” farther into the warren. Lis pounces and stabs the unsuspecting foe in the back. The jackalwere howls in pain and falls to the floor, dragging itself away into the next den. Another jackalwere lurks there and comes forward to investigate. Seeing something obviously amiss, it engages Lis in combat. The rest of the gang come forward to assist and soon both of the jackalweres lie dead.
They carefully explore the passageways, finding a network of interconnected dens. Each one holds a pile or two of blankets and furs. It is quiet. It appears that the jackalweres are either lying low, or have vacated the place. Waldo conjures a black weasel familiar and sends it ahead to investigate. It finds a much larger chamber just around the next bend. Six jackalweres stand at the ready, as if awaiting an attack. A seventh larger one stands at the back of the chamber. He glowers over the heads of his smaller minions. Small antlers, like those of an antelope, adorn his head. He stands next to a metal table, upon which a woman lies prone, apparently unconscious. Despite its stealth, the weasel is soon noticed by the alert jackalweres. Waldo instructs it to dart forward and see what it can see, before it can be killed. It brazenly scampers forward, evading several vicious kicks as it does so. It clambers up the leader’s leg to get a closer look at the unconscious woman. She does not appear to be bound in any way, but she seems to be in bad shape – pale, bruised, and bloodied. Waldo can see no more, because the jackalwere leader grabs the weasel in his fist and crushes it out of existence. He grasps the woman’s hair and pulls her head and shoulders up from the table’s surface, and calls out to his hidden foes: “Come forward. Show yourselves. If you want your spy back, you’ll have to let us pass!”
They decide to send Templeton with “Olaf the captured jackalwere” (Lis in disguise) to arrange a hostage trade. Templeton is an angry, aggressive gang member intent on getting these jackaweres out of his gang’s territory. He argues, accuses, and taunts, drawing the jackalwere leader into a hostile dispute. The adventures feel confident that they have the advantage, believing their foes to be bottled up in their den, with their rear exit likely compromised by the burning warehouse beneath which it emerges. They believe that the jackalweres, despite their bravado, have little bargaining power.
Templeton demands an explanation of why the jackaweres are here invading Riverton Rat turf. He vehemently accuses them of murders, thefts, and the disruption of Rat operations. The jackalwere chief responds, “Just like you, we are trying to survive! We were driven out of the upper city by a corrupt faction of our pack. That’s right. You invaded our den when your real enemies are up in the city! They’re the real bad ones, casting evil spells, and deceiving the wealthy. But we’re like you! We’re just trying to survive. You too – you Rats – you are also lawless gangsters! You sent this spy to trick us, to cheat us, to steal our assets. And now here you are attacking us! Allow us leave in peace and you can have your filthy spy back. If you hurry, you might even save her life. Then go up to the city – you’ll find my old pack – the traitors – working in the Wide… selling books and swindling the well-to-do. They call themselves the Amberdune Pack. They’re the real bad guys. They have no honor!”
During this discourse, Waldo conjures an owl familiar and sends it back the way they had come, seeking to scout the passageway leading to the arrow slits. The owl (dubbed Hoot-dini) finds a pair of jackalweres poised above cracks in the stone floor, ready to rain arrows into the large chamber. A small party of consisting of Grixori, Wrenn, and Mickey follow, intent on taking control of the arrow slits. They do so effectively, killing one archer, and driving another one further into the tunnels.
Meanwhile, negotiations are breaking down. The jackalwere chief accuses “Olaf” of cowardice and weakness. He insists that the errant jackalwere assume the form of a lowly jackal and come grovel at his feet. Lis, realizing that he will be unable to maintain the ruse, leaps to the attack! Battle erupts, and the melee is fierce. Blood is spilled on both sides. Several jackalweres are killed, but not without injuring several of the adventurers. The jackalwere leader strides into the bloody fray, leading his pack to focus their attacks on the fiercest opponents. Templeton is killed, and Grabnar is brought to the brink of death. The pack chief, seriously wounded himself, grasps the fallen Grabnar in a headlock, and holds a wicked knife to his throat. He commands his foes to stop fighting, or he will slit the dwarf’s throat. Waldo, persuades the desperate jackalwere chief to stay his hand and allow him to stabilize his friend in exchange for a halt in hostilities. He reluctantly agrees, slowly lowering Grabnar’s limp body to the blood-soaked dirt. The gnome pulls out his healer’s pack and staunches the blood flow, keeping Grabnar clinging to life for now. The tension is thick, and all the combatants stay their hands while this unfolds. Although Grabnar is stable, he is still in desperate peril. The jackalwere chief demands healing for himself. Waldo ponders whether to accept this demand, and how his decision might affect the outcome of this situation.