The family attends Mallory's fencing contest at school. During the contest, Jared finds a boy identical to him going through Mallory's bag. He transforms into a smaller kid when Jared attempts to scare him with his knife. When Jared and Simon discover that Mallory has disappeared, they search for her in an abandoned quarry, but wind up being kept prisoner by dwarves. Mallory is revealed to be sleeping in a glass-coffin dressed in medieval garb (similarly to Snow White), with the dwarves saying she is now immortal, so long as she stays in the coffin. Escaping their cage, the twins free Mallory and meet a strange creature, called a Knocker, who tells them the way out by listening to the stones. They next see a huge metal tree, made by the dwarves, the Ironwood Tree. After a narrow escape from the dwarves' mechanical dogs, they make their way out of the tunnel but have to hide before leaving. They secretly watch Mulgarath, a hideous ogre who wants to rule the world, callously order the death of the dwarves for having been tricked into not getting the Field Guide from Jared. The dwarves are mauled to death by the goblins and Mulgarath reveals that he had the Guide the whole time. The siblings escape just after Mulgarath leaves with his goblins and the weapons made by the dwarves