The Dwarves
Dwarves are squat men and women, all bearded, and all dressed in gold embedded with the finest jewels. They have no magic as we know it, but they do not need it, for they command the very earth with just a spoken word and craft it to do their bidding.
Dwarves do not exist, they have never existed, and they will never exist. But, for all their ingenuity, all their common sense, and all their spoken gruffness about needing there to be proof for something for it to be real, the gnome’s believe wholeheartedly that dwarves exist.
So deep is their belief, a seat has been reserved at the Great Council Hall for centuries, and will be rewarded to whoever among them finds the city of the dwarves. The dwarven city is believed to be deep within the earth, and crafted of gold and gemstones with rivers of molten silver. Most of the population of the city of Shallan vanished into the bowels of the earth in search of the dwarves, and those that stayed behind abandoned the city.
“Evidence” of the Dwarves
No race other than the gnomes believe in the dwarves, the titans do not speak of them, and the kobolds that spent eons in the caverns beneath Aelura do not have a word for the dwarves in their language. The most devout gnomes, those that have spent their lives in the pursuit of the myth, try everything to convince the other races.
Gnomes have amassed a huge stockpile of documents based on their discoveries from all subjects, but the section on dwarves is the most varied and numerous. No one is permitted to view the gnome archives beside the senior archivists, so the majority of the “evidence” comes from notations and documents release to the public, and word of mouth, as no gnome wants to give a member of another race the satisfaction of the great discovery by giving them too much knowledge.
Most “evidence” to the existence of dwarves comes from writings on oneirology and magicology, the study of dreams and magic respectively. “A Beginner’s Guide to Oneirology” by Rhosa Anleri is the most cited example, as she attained a place on the high council for her writings on dreams and magic, and she is a highly respected historical woman. Every dream used as "evidence" of dwarves is a variation on Rhosa's description of them, and it has become a common part of the myth that dwarves are able to step between the planes and meet gnomes in the dreaming world.
Bhaldrum and the Forge of the Earth
During the time of Rhosa Anleri and her writings, there was a gnome by the name of Lorul who dreamed of a great and powerful dwarf called Bhaldrum. In this dream, Bhaldrum told Lorul about how he came to possess the forge of the earth, and this fable has been treated as fact for as long as the gnomes have heard about it.
According to Lorul, Bhaldrum was cast out from the city to find his path after losing to his father in a duel. While wandering the earth, he came upon a river of water, something he had never seen. Curious about it, he tried to step on it and fell into the current. Bhaldrum tried to resist the flow, but he was unable to and was dragged under.
When Bhaldrum awoke, he was on the shore of a large underground lake with rolling waves of water lit by millions of glowing crystals. As he sat in awe of the surroundings, he became aware of the sound of metal on metal and the smell of smoke, and was drawn down the shore towards it.
The sound and the smell were of the dwarven forges of the city he called home, and far down the shore was a massive staircase leading up to a bridge that led to the forge. Though Bhaldrum walked the shore and the bridge for hours, he did not tire and was being pulled towards the forge as if by some unseen hand.
When he arrived, he found the forge being worked by an old and grizzled dwarf but what the dwarf worked on was not armour or weapons, but gleaming hunks of gold created from ordinary stone. When the old dwarf saw Bhaldrum, he smiled as if greeting an old friend, and reached out a hand to Bhaldrum.
When Bhaldrum reached forward and clasped the hand, the old dwarf crumbled to dust, and Bhaldrum found that he instead was holding the forge’s hammer. He knew then that he had taken on the role of Forgemaster.
Despite Lorul’s questions about it, Bhaldrum would not explain how the forge worked, saying that only the Forgemaster may know. When Lorul asked to be made a Forgemaster, Bhaldrum smiled and told him he must find the forge.
After waking, Lorul wrote everything about the dream and the story down and ran out to his father’s forge to say goodbye. The father had been working all night, and was confused about his son’s sudden urgency to leave. Lorul packed up his things and left home, leaving only his notes on the Forge of the World behind, and was never heard from again.
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