The Dwarven Graveyard is located in the southeastern mountains of the wilderness map. It cannot be found until the PC talks to Thrundarr about "portal". The portal seals the lower parts of the CoC until the PC finishes this quest or removes Thrundarr from his location in Dwarftown and 'h'andles the lever controlling the portal. It is most definitely worth doing the quest, since two artifacts can be found in the graveyard.
There have been conflicting reports about the rewards Thrundarr provides for accomplishing this quest. It is always equipment, though the status varies. Whether holy water is poured on Griff's grave seems to make little difference in this preliminary examination:
Griff destroyed in melee, no holy water poured on grave:
uncursed wand of digging (0 charges)
uncursed wand of fireballs (1 charge)
heap of 6 blessed potions of extra healing
a different PC, same scenario:
uncursed wand of digging (5 charges)
uncursed wand of fireballs (1 charge)
heap of 3 blessed potions of extra healing
Griff destroyed in melee, poured holy water on grave afterwards:
uncursed wand of digging (5 charges)
uncursed wand of fireballs (3 charges)
heap of 4 blessed potions of extra healing
Griff destroyed by pouring holy water on grave:
blessed wand of digging (2 charges)
uncursed wand of fireballs (2 charges)
heap of 8 blessed potions of extra healing
Using holy water on Griff's grave produces the message:
You pour some water on the ground. You are overcome by feelings of gratefulness.
2.7.1 Surface level
The surface level of the graveyard is an open plain inhabited by many, many undead. There are skeletons, zombies, ghuls, shadows and wights present. This is also probably the first time the player finds graves. Most of the graves are not of much importance, but some of them will contain the inscription "Great treasures are buried here." This inscription needs to be taken with a grain of salt. It is indeed possible to find an outstanding item, up to and including artifacts, in a grave marked with that inscription, but it is rare. Digging up graves is a chaotic act, and will always summon some kind of guardian. These range from lesser undead, guarding the ordinary graves, to very dangerous greater undead such as ghost kings and emperor lichs guarding the "Great treasures are buried here." graves. It is probably not worth trying to dig up the "great treasures" graves with a level 13-17 PC. The PC can always return later if desired. All of this regarding digging graves assumes the PC has a means of digging. The available methods are a pickaxe, a wand of digging and the Mystic Shovel spell. There is a guaranteed pickaxe in the Pyramid for PCs at experience level 13 - 16 (see section 2.9).
If the PC has a limited supply of undead slaying ammo use it very sparingly, if at all. It will be needed in the underground level.
The center of the plain contains a small building that leads to the underground level.
2.7.2 Underground level
The underground level of the dwarven graveyard contains a labyrinth which features many traps. It is very wise to have the Detect Traps skill while navigating this maze. Use the 's'earch command constantly if the PC has the Detect Traps skill. The left side of the screen is the problematic area regarding traps. The right side of the screen is Griff's tomb, which has been taken over by Nonnak, the master necromancer. It contains a large number of undead, including ghosts, wraiths, Griff Bloodax the undead dwarven chaos berserker and Nonnak himself.
There are two artifacts hidden in Nonnak's lair. The elemental gauntlets are found in a hidden room in the center of the eastern wall. They are guarded by a bone golem and are almost always located on a trap. The bone golem is not difficult to defeat for a PC that has made it through the dwarven graveyard. The Sword of Nonnak is located in Griff Bloodax's grave in the center of Nonnak's lair. It is necessary to have some means of digging to retrieve it. The sword is quite important for wizards, mindcrafters and other classes dependent upon Willpower. It grants +5 to Willpower. Note that digging up Griff's grave to retrieve the sword is a chaotic act, like any grave digging.
2.7.2.1 Griff Bloodax
Griff Bloodax, the undead chaos dwarven berserker, is a brute force opponent. He does not seem to have any special attacks, though his melee attack is formidable for a level 13 PC. Note that Griff is teleportation resistant. Therefore simply trying to teleport him away in order to reach his grave and 'u'se holy water will not work. Using undead slaying ammo is very effective against him, while melee with a low-teens experience level PC may be difficult.
2.7.2.2 Nonnak
Nonnak is the master necromancer that created the undead guarding the tomb. He is vulnerable to fire-based attacks and potions of blindness. He uses Frost Bolt as an offensive spell and has a mediocre melee attack. PCs without cold resistance will have a very hard time defeating him. He is also a summoner. Note that both Griff Bloodax and Nonnak must be dead to fulfill Thrundarr's quest.