With the entrance accessible, a cheery, if simplistic and repetitive, tune (track 11 月夜の出来事 / "Events on a Moonlit Night") plays in the previously pointless empty room. Dwarves wander around in the next, larger, chamber.

Although I'm not attempting to do much with it, note that the generic dwarves have a rather strong accent, one that I believe has sort of a "hickish" feel to it.

妖精 (yousei) is more commonly translated as "fairy", but we're not dealing with Tinkerbell here. Better to avoid those connotations.

That doesn't sound reassuring. Regardless, we're also looking for a blacksmith. The hammer and anvil sign looks promising. The dwarf inside wears a horned skull as a helmet, stands by a pool of lava and an anvil, and has weapons and armor on display. This ought to be the place.

A bit of hammering and cooling later...

This replaces the Rusted Holy Sword with the Defender, which has higher attack power, raises Agility by 1 (regardless of the description), and allows weapon skill to increase to a maximum level of 2.

That's one task dealt with. Forging an axe could take a while, though, so let's kill some time.

Sure, why not?

Hold on a second. He looks just like the...

Naturally, the game skips that line if you never spoke with the elder.

"Dancing Beasts" starts playing.

The party jeers as a Rabbie and a dwarf appear on the stage.

A tiny creature with a huge (relative to its size) mass of salmon hair appears on the stage.

That poor child needs the money more than we do, right? Besides, refusing just leads to a But Thou Must loop anyway. Suddenly, the creature becomes rather less tiny, though still no larger than a human child, not counting the hair.

Something seems fishy about this. Investigating reveals a tunnel between the elder's room and the show room.

The party confronts them.

He refunds both the 100 Rukh they scammed and the 50 Rukh cost of watching the show. Unfortunately, as soon as the party returns to the central chamber after both confronting them and starting Watts on forging an axe, a sudden earthquake interrupts.

Another boss from underground! The Bud (Tropicallo), a large plant with a face that spits explosive bouncing pumpkins, comes with a Blood Roper (Brambler) or two (one doesn't always spawn) that extend vines in the general direction of the party. The Bud retreats underground when hit, then pops up in one of three preset locations soon after, so use charged attacks to maximize damage, and repeat as needed. The Blood Ropers can also be killed, and will not respawn.

Computer-controlled characters don't know to wait until the Bud's shell opens before attacking, so don't expect much help from them.

He turns to the child.

It wouldn't be nice to refuse, and besides, But Thou Must.

The elder keeps using name-like variations on チビ (CHIBI), which is a less-than-formal way to refer to children or small people.

Talk to the sprite child to continue.

It's literally "big brother", but family terms are often used in a looser sense than actual family members.

The Japanese manual uses the name ポポイ (popoi), which the remake just leaves as "Popoi". To be fair, there's not much you can do with that.

The Sprite has neither the strength nor toughness of the others, but combines decent Agility with high Intelligence. He comes wielding the Boomerang and wearing a Munchkin Robe.

The question of whether The Sprite is a boy or a girl comes up fairly often, apparently. Personally, I don't think it matters, beyond pronoun choice, unless you're trying to invoke Rule 34. Even the Japanese manual gives The Sprite's gender, as well as age, as "unknown". Regardless, masculine pronouns are normally the default for English, and The Sprite does seem to talk in a boyish fashion. This is hardly conclusive, but The Girl doesn't do that even at her bossiest, so that may have been done deliberately. Either way, "it" just seems rude.

As usual, remember to set The Sprite's behavior settings and get him a full set of equipment as soon as possible.

Talk to the elder to continue.

Good idea. That axe ought to be ready by now.

The axe isn't worthless. It just doesn't seem to have any special properties, like he was hoping it would...

...but then he notices something curious about the Boomerang...

...and like Luka said, it's using them with the Holy Sword that gives the other weapons their power.

Considering that was half the point of coming here, it's going to be necessary.

He walks to the side and removes a barrier blocking a stairway.

The stairway connects directly to the former dead end in the eastern cave entrance, skipping the monster-infested caves entirely.

Remember to reforge the Pike, which makes it the strongest weapon again, before leaving.

Now that everyone has a reason to go see the witch, let's return to that forest...