Lord Kurog and his companions leave Blackgate after fending off a Hill Giant attack and head north following the observed direction of flight of the shadow demons. On the way they fight several huge deformed trolls, and find a huge swamp fills the valley beyond a great dyke formed by piles of rock that have fallen from the mountains on each side. In this unnatural swamp, they are attacked, but kill, a acid burned hydra, before finding a Dragon that is so large that they initially mistake it for a large hill. Fortunately for them, it is sleeping and they do not wake it (indeed, they never venture near its head).