Willow and Burr gather up some equipment, then search around in a trophy room deep within Naochi Castle until they find an entrance to an underground kingdom. They go down a spiral staircase, finding themselves in a cavern with light provided by glowing moss, and a "forest" of mushrooms and strange trees. They carefully avoid a sleeping (?) dragon, and then encounter some glowing blue crystals with unusual acoustic properties.

Willow assigns Burr to try to break off a piece of crystal, while she explores further, and encounters a small village made of mushrooms, with even smaller people – little blue imps – living inside. They prove to be hostile, and Willow retreats. She gathers up Burr, and they arrange a distraction. Willow and Burr head off through a hedge maze while the Schlumphs are hunting elsewhere, then go through a magical trap as some killer thorns lash at them – but Willow realizes that the thorns are ignoring HER, and she gets through it by holding Burr's hand as they pass through.

Inside an underground palace, Willow sneaks past a couple of guardian statues that seem capable of pummelling most creatures into pulp … and then she encounters a ghostly banquet, where ancient events are reinacted … and she has further reason to dislike her apparent heritage. The illusion fades, though, revealing a nest of Grooks. Willow uses a magic lantern she found in the Trophy Room to throw off the Grooks momentarily, while she rushes to meet up with Burr. Together, they head out … and encounter the Schlumphs. In the ensuing battle, Burr gets frozen by the magic wand, and Willow kills the leader and several of the Schlumphs. She then gets the wand to unfreeze Burr … and the dragon (which had not attacked earlier because it was encased in ice). That done, she resists the urge to keep the wand, and instead breaks it.

The wand reveals itself to be a hideous creature of Bosch, and Willow finishes it off before it can re-form. She then tends to Burr … while a very angry dragon goes on a rampage outside, toasting the Schlumph village. The Schlumphs pursue, including a nasty leader who has a magic wand that freezes things.