The companions rest in the forgotten temple of Mishakal, recovering after their journey into the subterranean ruins of Xak Tasroth. Arthur uses his newly discovered divine powers of healing to tend to the party’s wounds. The next morning they venture back through the swamps and mountains, returning to the plains where they witness the sight of smoke rising in the distance.
Arthur also remembers the vision he experience and the words spoken to him by the goddess Mishakal. That he must find the leader of the people, the one who will return the word of the gods to all the people of Ansalon.
Deciding to return to Solace and find the source of the ominous black smoke, the group sends Arthur’s magical bird ahead to scout. Partway home they spot a crimson shape on the horizon, flying quickly through the air. Ducking for cover in a dried river bed they watch as a huge red dragon flies overhead, scanning the countryside with its keen eyes. The fully grown wyrm almost spots Gauraux in his hiding place before returning to its search. Realizing the dragon they faced in Xak Tasorth was not an anomaly, that dragons have indeed returned to Ansalon, they grimly resume their journey.
The companions reach Solace as the sun is setting, having been warned by Arthur’s bird that the city has been occupied by the “dragon men”. They discover the village has been razed, with the great vallenwood trees burned or uprooted. Few people remain in the city, with most working as slaves to fortify the town. The Inn of the Last Home has been lifted from its place in the trees and poorly placed on the ground, but still seems to be open.
Gauraux, Wilder Spirit, and Tictoklington investigate the town, scouting for survivors and the location of someone in charge. Tictok finds the barmaid Tika is still working at the Inn and tells her their plans to rescue as many people as possible. Gauraux, looking for information, finds a hobgoblin that has separated from his squar and knocks him unconscious. Dragging the stunned mercenary through the town, Gauraux is spotted by a draconian patrol but manages to convince them that the goblinoid is simply drunk. Elsebeth and Gauraux quickly set to work interrogating the hobgoblin merc, and discover he know little about the source of the Dragonarmies, beyond their origins somewhere “to the North”. He tells that they have taken several towns and are busy amassing troops at Solace, Haven, and the fortress of Pax Tharkas. He mentions that the army is being lead by someone known as " Highlord Verminaard ".
The companions set themselves on rescuing the slaves and remaining townsfolk of Solace. Tictok, Elsebeth, and Arthur decide to create a distraction allowing Wilder Spirit and Gauraux to free the penned slaves. Tictok unleashes a mechanical monstrosity of grasping tentacles, which captures a patrol of draconian, while Arthur creates an illusion of an entire company of mounted Solamnic Knights modeled after Else who busies herself with the first wave of reinforcements. Elsebeth soon discovers she is facing a different breed of draconian, one that dissolves into a pool of acid when slain. As more troops arrive, Tictok, Arthur, and Else flee from the almost endless wave of dragon men. Tictok stumbles and is almost captured, but Elsebeth heroically rides over and hauls him into her saddle.
The heroes flee with the slaves along the road south, skirting the edge of the Darken Wood. They flee to the only safe harbour they can think of: the elven forest of Qualinesti. Thankfully, several of the slaves are elven, and the group hopes this is enough to keep them from being killed on sight. While resting after a day of flight, one of the slaves introduces himself as Gilthanas, son of the Speaker of the Sun and an elven prince. He assures the group that they will have safe passage through the woods.
At the edge of the elven kingdom, the group encounters a strange old man, a wizard by appearance, who is arguing with a tree that is in his way. The befuddled old man introduces himself as Fizban the Fabulous. And he agrees to accompany the group through the woods.
The group has barely entered the wood when they are surrounded by elven warriors with raised bows. Gilthanas steps forward and speaks regarding the party’s heroism, and introduces the elven band’s leader, his brother Porthios. Porthios sends his men to escort the freed slaves safely through the woods. Meanwhile, he will escort the companions to Qualinost, the elven capitol.
Once the group reaches Qualinost, they find the city in a state of unrest, preparing for war or flight. The heroes are taken to the golden Tower of the Sun, and introduced to the elven ruler. He tells them of the plight of the elven people, how the Dragonarmies plan to strike hard into the nation of elves, and have three armies poised to strike. The elves have little chance against the force and the dragon, and must flee, escaping across the western sea into the unknown in the hopes of finding safety.
The Speaker tells the heroes of how the human folk of the land have been enslaved, and are being held in the mines of Pax Tharkas. Their wives and children are being held separately and used as hostages to keep the menfolk from revolt or unrest. The elves know a secret way into the fortress, via a long forgotten tomb, which might be used to sneak a small force into the fortress to free the slaves. With a large force at his flank, Highlord Verminaard might be unwilling to move against the elves, buying time for their retreat.
Arthur finds his stay in Qualinost distressing, as he is confronted by an angry Speaker of the Sun for wearing a medallion of faith and claiming to be a healer. Even after proving his power, he is met with distrust and scepticism from the elves, who view it as a great insult that a human would be chosen by the Gods of Light rather than an elf: the firstborn children of gods of light. The elves have not forgiven the gods for abandoning them and still blame the humans for driving them away. Arthur, however, knows that it was the mortals that turned from the gods and not the other way round and that all races bear the blame for the god’s actions. But the prideful elves are unwilling to accept this.
Still, as a small measure of respect for Arthur, the elves part with a suit of elven chain, giving it to him as a token gesture.
After two days of hard travel through the forest, the group arrives in Pax Tharkas. There they see the vast forces of the Dragonarmies as thousands of draconian march north upon Qualinesti. The heroes move to the foothills and find the hidden entrance to the fortress. Gilthanas opens the Sla-Mori, the secret way, and the group moves into the hidden tomb. Turning down the winding corridors they come to a long chamber filled with entombed servants. Moving to the far side the dead awaken, and the group rushes through the door sealing it behind them. Continuing forward, they find the great Chamber of the Chain, the end of a great mechanism that can be used in emergencies to seal the great gate to the fortress.
Searching the ancient room, Gauraux discovers a hidden door that leads to an empty treasury. There, on the floor, is a desiccated corpse. Suddenly, a ghostly phantom rises from the body and moves to attack. Elsebeth, Gauraux, and Wilder Spirit rush forward, striking at the banshee. The evil ghost begins its terrifying wail, that threatens to instantly slay all that hear it. The heroes rally, making a final attempt to kill the spirit before they are killed. After several devastating strikes to its vital non-anatomy, Wilder Spirit delivers the final blow.