The heroes wake up and follow what appears to be the bandit trail further south. They come across an area with a broken down wagon. Gabriel investigates the wagon and sees gems and possibly some weapons. Gabriel tries to grab this treasure but then finds himself caught in a bear-trap.
As this occurs laughter erupts and the heroes are flanked by a large group of bandits with a female leader. Ceadwy attempts to trick the female leader that he led the heroes to the bandits to recover the reward for the heroes having killed some bandits previously. This ruse at first appears to work and the group of heroes not caught in a bear trap are led by the bandits to discuss the terms of the rewards. The female leader then reveals she was not buying the story and the bandits attack.
The battle was very desperate and looked bleak at times. But because the heroes had given the gem to the fairies the previous night, the fairy creatures helped out in battle and all but vanquished the bandits. Ceadwy fought valiantly, but ultimately fell in battle and was near death. Ceadwy was given some potion which helped, but Ceadwy would need to return to Oleg’s soon if he was to survive.
Daine thanked the fairies for their helped and learned that the fairies are located northwest of where the moonradishes. The fairies also like to hear singing.
Gabriel interrogated the remaining bandit and learned more of the Staglord. He also learned that while the bandits took Svletlana’s ring, Mites then stole the ring and took it southwest into a sycamore tree. The bandit tells the heroes that Staglord’s lair is a fort located on the northwest shore of Tuskwater. This is located far to the south. The password to get in is, "By the bloody bones of St. Gilmorg, who wants to know?”
The heroes get back to Oleg’s with the barely living Ceadwy. At Oleg’s they meet a Erastilian Cleric, Jihad Kapken, who brings both Ceadwy back to full health. Unfortunately, the once unblemished Ceadwy now has a scar on his chest running diagonally down right from his the area of his heart.
Exhausted, the heroes turn in for the night.