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"Síðasti bærinn í dalnum" is in the spirit of old folktales, a classic fairy tale about the struggle of good and evil. In the countryside, all the farmers have fled because of pestering trolls. One farmer, however, holds his ground with his family as the grandmother keeps a magic ring that protects the inhabitants from all evil. The trolls try to steal the ring and thus set in motion a series of events where forces of evil, a dwarf who can make himself invisible and an elf queen come to light.