Originally a settlement of Kobolds unwilling to welcome others to their city, Nyttheim is now a nightmare – a land filled with possessed Kobolds serving an unknown lord.
Long ago, when Hallvaror decided to allow the Kobolds to go to the surface and live with the other races of Midgard, it made a group of Kobolds very nervous. Although those who went above ground had promised to keep knowledge of the city secret, this group, lead by a female Kobold named Astrior, still feared that those from above would invade their underground home Astrior pleaded with Hallvaror, begging him not to allow the others to venture above ground, but Hallvaror had made his decision and would not change his mind. Hallvaror's decision angered Astrior and the others, all of whom had lost someone in the attacks by the Morvaltar so many years ago. They did not want to stay in a place they considered unsafe, so the decision was made to leave the Kobold city and venture out on their own - not above ground, but further into the depths of the earth.
Long before, when the kobolds had begun construction on the Undercity, they discovered a tunnel leading to another, much larger cavern beneath the one where the city was being built. Busy with construction, Hallvaror did not send anyone down to thoroughly explore it. This is where Astrior and her followers began to search for a place to live. Deep within this expansive cavern they found a passageway that led to a smaller chamber. Although this chamber was not as big as the Undercity, it would suffice.
Astrior and her people began the arduous task of building a new cityin this chamber. Hallvaror offered both supplies and people to help, but Astrior and her people refused; they wanted nothing more to do with Hallvaror's people. When the new city was done, Hallvaror attempted to maintain contact with Astrior and her people. He even set up an outpost near the entrance to this new city, called Nyttheim by its residents, but his attempts were met with a cold politeness. While they were not forbidden from entering Nyttheim, Hallvaror's people were never made to feel welcome. Only those who agreed to give up their ties to the Undercity were welcomed into Nyttheim. Surprisingly, over the first few years, quite a few Kobolds did move there. Over the years though, the people of the Undercity became busier and busier and contact between the two groups was lost and the outpost abandoned. Eventually, Astrior and the others said disappeared into the dark solitude of their new home.
While Hallvaror and his people continued their lives in the city above, Astrior and her people explored the areas beyond Nyttheim. Often led by Astrior's daughter, Kolfinna, groups of Kobolds discovered a vast underground forest in the cavern beyond their city. As Kolfinna and the others explored the underground forest, they discovered they were not alone there. Other races had also come to explore the forest. The most important and ultimately devastating discovery, though, was the cave that lay beyond the forest. The cave was a focus of power for an ancient evil of Midgard, which was just waiting for the opportune moment to break free of its prison and unleash its chaos. No one at the time, not even the ever-vigilant Astrior, realized just how dangerous the evil spirit really was.
The evil spirit, that of a long dead woman named Gullveig, managed to take control of Kolfinna. One by one, over the course of many generations, Gullveig ensnared the Kobolds of the new city, Nyttheim. As each one was lured under Gullveig's control, her power increased. Her evil flowed out of the cave and into the grotto of trees. That is when Valda, a descendant of Astrior and Kolfinna, finally sensed the encroaching evil. In a desperate attempt to save her people, Valda pulled them all back to the very edge of the city. For a long time, the strongest Kobolds were able to hold out against Gullveig's power, but eventually, they too fell under her thrall.
With the Kobolds now in her complete control, Gullveig's power was strong enough that she could send out a call across land and time to summon even more creatures to her. The creatures filled the grotto of underground trees, and eventually spread out into the vast cavern between the two Kobold cities. With each creature that answered her call, Gullveig became more powerful.
Now her power has reached its full capacity, and Gullveig has set her sights on the Kobold Undercity, for it alone lies between her own forces and all of Midgard.