The Highlands Dwarf is a creature that lives within the Highlands Cavern in the Highlands. The Highlands Dwarf will be confined in a cage after the player reaches the area in the upper right of the cavern (which is normally blocked by a rock.) The Highlands Dwarf will request that the player release it by beating the boss Pepper in a minor event.
After defeating the boss and retrieving the Golden Key, the player can return to the jail to rescue the Highland Dwarf.
When the Dwarf is free, a cut scene will play.
The Dwarf is worried that humans are becoming too powerful and uncontrolled and that they will destroy themselves as the Elves once did. The Dwarf still has hope that there are humans who are willing to be wiser and kinder than their ancestors.
The Highland Dwarf will set its shop at the boat dock after one day. The shop sells a variety of ornamental things that are uniquely available here.