An old man and his granddaughter once lived in a poor little house in Hundsheim. One day, while sponging on the witches' mountain, the girl met a crowd of little men, the inhabitants of the cave kingdom in the witches' mountain. The dwarves invited the girl to join them in the mountain and promised her rich treasures of silver and gold. But she steadfastly refused to go and hurried home, where she told her grandfather about her experience. The old man praised her wisdom and warned her strongly against the dwarves.
When the maiden went up the mountain again the next year, she met the dwarves again, who this time promised her not only gold but also precious stones, as much as she wanted, splendid clothes and a wonderful, merry life. This was too much of a good thing and made the girl forget her good intentions and her grandfather's warnings. Without thinking much, she followed the dwarves into the mountain. How amazed she was when she saw the splendour in the underground passages and halls! Sparkling gems glittered from every wall, the most delicate flowers, composed of diamonds, rubies and emeralds, were resplendent in the magnificent magic gardens they passed through. She could not get enough of all these splendours, forgot all about the upper world, grandfather and friends and stayed in the realm of the dwarves.
The old man, so suddenly lonely, was inconsolable at the loss of his beloved granddaughter. He was firmly convinced that she had succumbed to the lure of the dwarves, and often went to the dark entrance of the dwarf kingdom on the mountain to ask the guards to give him back his granddaughter. But they would have none of it and threatened him with death if he tried to enter their kingdom.
The maiden had been in the mountain for a year. It happened one day that during her wanderings through the magnificent underground rooms, she came near the entrance to the cave, where several armed dwarves were keeping watch. Suddenly she was surprised to see a piece of blue sky shining into the darkness of the cave and was seized by a deep longing to see her dear grandfather again and to live on earth among the people. She wanted to hurry out into the open, but the guards held her back by force and dragged her into the interior of the mountain despite all her reluctance. Just at this time, the grandfather came to the dwarf's castle, heard the cries for help and recognised his granddaughter's voice.
He pleaded with the dwarves to let his child return to the upper world, at least for a day. Tears ran down the old man's cheeks. But the dwarves remained firm and adamant and turned the old man away from the entrance.
Then the old man was overcome with bitter pain and fierce anger and uttered a grim imprecation against the dwarves and their glorious kingdom. And heaven heard his curse and immediately made it come true. The earth shook, a terrible roar sounded from the bosom of the mountain, the halls of the subterranean palace collapsed and buried the goblins, but with them also the poor captive human child.
Where once the splendid rooms of the magnificent mountain castle shone in bright splendour, now lie the gloomy, wild limestone caves of the dwarf hole.