The group found themselves surrounded by Slazzik Balefire and his band of Kobolds. Balefire did not make his intentions known to them, but his battalion of armed allies made the party not want to risk any chances. Using trickery, Gendra made the kobolds look for a non-existent silver dragon. The group defeated and killed all but two of the kobolds. Each kobold wore a golden pendant with a three-fingered claw.
The party returned to town to rest and sell their loot. On the way, they encountered an odd, but weak tornado-like elemental. Upon resting at the inn, Marcylla found herself returned to her normal self. The next morning, they saw Jack again, and Brutus told him that the best way to get the attention of women was to be heroic. Jack went off right away to prepare for his journey.
Returning to the cave, they plunged through the cavern and found the Kobolds they left alive were gone. They traveled through some passageways and encountered 6 Giant Fire Beetles, whose glowing parts were skull-shaped. They squeezed their way through some tunnels and swam through an underground waterway and found a treasure chest. Upon opening it, they discovered animated dolls and destroyed them.