The Knuckle was a mining facility of the Steelhand Clan located just south of the Dolm bay. While the main Steelhand Clan was defeated in battle, the Knuckle was defeated by a dangerous supernatural curse known as Glitter Madness.
The dwarves working in the Knuckle struck a fortune of gold deep in the earth, an unimaginably rich hold, cursed with a dark ancient magic, causing those who greeded after it to become struck with Glitter Madness. This mania caused the receptor to want to slay all of their enemies, foes, and anyone else who gets in the way of them and the gold. The curse is induced on a delay, so soon after the dwarves brought the gold to the surface, its effects triggered and they all blasphemously attacked each other.
The priest of the Knuckle, now calling himself Greedyguts after the curse, used his magic to curse the whole knuckle with "Glitterdoom", a magical curse turning all of the living dwarves into shadows of their greedy selves, unable to carry the gold, letting Greedyguts own all of it to himself.
When the dwarf known as Okkar Ironeyes used ancient and decrepit maps to find the Knuckle again, he found himself almost killed by the specters within, causing him to fall back to the closest city, Dolmvay, asking every dwarf he can if they know anything of "glitter madness".
His call was answered by a faction of adventurers known as The Best Around, who agreed to travel to the Knuckle in exchange for partial claim to the dwarven treasures inside. After investigating and fighting the ghosts inside, they discovered the tunnels that lead back towards Steelhand Hall. A few hours in their spelunking, they came across The StoneFist.
Only a year after the first rediscovery, another hopeful Dwarf by the name of Irun Gemhanded led a voyage to investigate the now infiltrated dungeon. It was with the help of the NWO that Irun discovered a splinter cell of the Cult of the Dragon that had taken up residence in the Knuckle. This faction was hoping to resurrect the dragon known as Vezoth, who had been rumored to have been slain in the nearby StoneFist. Their members were slain in the battle that ensued, but their ritual was not stopped, and stories tell still of intruders hearing the distant roar of a dragon deep within the abandoned dwarven mines.