The heroes returned to sleep (except Korlash, who buried the dead), and awoke the next morning to the realization that they had insufficient food and water for their refugees. After their foraging proved insufficient, they rationed their reserves and marched the survivors towards the next town on Old Empire Road. Upon reaching the edge of the Great Forest, they tried foraging again, and while they found little sustenance, they found evidence of logging activity. Following the activity North, they found Falcon's Hollow, a logging town if nearly a 1000 people, that is chartered by Yamdek Keep.
Their the heroes met the Sheriff Deldrin Baleson, a half-elf that tells them the town that overnight had been attacked by kobolds. He was on his way to report the success of the combat to manager Gavel Kreed and was willing to present the heroes to Gavel so that the story of the attack of Yamdek Fields and the exodus of the survivors could be relayed. Gavel hears the story and explains that the town has experienced significant kobold problems recently, probably related to the appearance of a "giant" kobold leader. Luckily a solo adventuring human warlock had informed the town of the attack, and other good information about the kobolds and their new leader. This warlock had said he had found a secret entrance that would allow him to assassinate this kobold leader without fighting hordes of kobolds but he never returned and was assumed dead. It was unknown by what means he gathered this information. Gavel excused himself to hear an assessment of the dead and missing from the Magistrate, and while the heroes talked to the Sheriff, hoping to broker a deal for the refugees in exchange for dispatching kobolds, Gavel returned to his office distraught. The heroes learned that Jurin Kreed, Gavel's son, and four other children had been kidnapped while the rest of the town was distracted by the kobold attack. Gavel agreed to house the refugees and to send mounted halflings after the Yamdek Army in exchange for help returning the children.
Suspecting potential collusion between the warlock and the kobolds, the heroes tried to retrace his steps. Korlash (unsuccessfully) attempted to find his tracks, while the others find a ripped portion of his journal in the inn room he had stayed in and a general direction he was seen to travel towards while investigating the kobolds. Using this new information tracks were found, but strangely they appeared to transform to kobold tracks near the hilly territory to the East. The heroes eventually find a kobold cave entrance, but they have good reason to suspect that it is not the secret entrance they seek. Rather than waste time, they push forward into the cave. Lighting issues abound, and most of the group is attacked by pressurized steam traps. Hearing sounds of humanoid activity Korlash charges forward and reveals a lone kobold spiker. Using a key and a control panel, the kobold rolls a boulder down the hallway the heroes are in and then flees, leaving caltrops behind him. Davin attempts to learn the nature of the trap panel and discovers that is serves many purposes, most controlled by unique keys like the kobold spiker used to activate the boulder trap. Davin and Max jam dirt into the remaining locks.
After clearing the path the heroes see no sign of the kobold spiker and grow suspicious of their surroundings. They search for secret doors near the cave entrance to no avail but discover a secret door further along the cave. Unfortunately the kobold spiker was not running for reinforcements but hiding behind it, and Korlash (the most injured so far) was stabbed after opening the door. He attempted to give chase down the secret hallway, but the small size of the path was too difficult for him to squeeze through while fighting. Luckily the kobold was heard attempting to clean the debris from his trap panel shortly thereafter and was killed before he could make his third escape.
Not much further along the caves the heroes find the body of a dead Doppelganger, which they soon realize was the "human" warlock adventurer. Flinn takes the warlock's rod of corruption and Davin grabs the warlock's journal. A quick examination of the journal reveals much: that the warlock Vodros had infiltrated the kobolds with his shape-changing, that the kobold spiker was named Bob the Tinkerer and that he was a kobold mastermind of traps, that his keys (16 in all, each in a separate pocket of his leather armor) controlled nearly all the traps as well as terrain altering machines, the location of the secret entrance and the reason the kobold "king", Merlokrep, had been nabbing children (a prophecy by his priest Jeek-Jaw that the leader would die if he did not sacrifice human children), that Vodros was seeking Bob to get the key that would give him an even better advantage than just using the secret entrance, and more that they did not have time to learn of.
Armed with this knowledge, the heroes traveled to the secret entrance, a hollowed out tree leading down to the kobold caves behind a panel in the King's Lair. They found a keyhole and using trial and error they activated the panel they found. After a loud thrumming and scraping sound they opened the panel and burst out, learning the panel had moved the cave terrain so that the King's Lair was sealed off from the rest of the kobold caves.
A fierce battle ensued, but both Merlokrep and Jeek-Jaw were slain. One kobold piker surrendered and was interrogated as to the children's location. Korlash retrieved Merlokrep's battle-axe "Manfeller" and soon the children were freed. However Gavel's son Jurin demanding special treatment and caused much delay. Much more accommodating was young tomboy Kimi Eaveswalker, who seemed eager to take out her frustrations at capture on the kobold piker.
The heroes decapitated Merlokrep and returned to town, where the sight of the head without explanation caused some panic. The heroes presented the head to Gavel, who suggested perhaps the Adventures Guild would be happy to display it. The heroes tried to turn the kobold piker over to the sheriff, but he explained that it would create more work than it was worth, so the heroes turned over both the head and the piker to the Adventurer's guildmaster, named Grog. The heroes learned that young Kimi frequented the Guild, and they gave her some kobold armor and shield, and entrusted Grog with some confistated kobold weapons to let Kimi use when she was ready.