Steve learns from Tracy that it is believed by the townspeople that a giant dragon is responsible for the deaths, and that Harold Bly has the ability to control it. As another victim of the rash, Vic Moore, stumbles into old town, Steve follows. He, too, disappears without a trace. Steve learns that the old town was the original location of Hyde River, and that Hyde Hall is a cursed building where the dragon supposedly snatches up its victims. His and Tracy's initial disbelief fades after they spend a night in Old Town, chasing the dragon in an attempt to hunt it, but the dragon's impermeable scales are able to mimic the background scenery, rendering it virtually invisible.