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ByTheWay: The complete schedule of stables and ships you can find in the Reference Section.
By the way, he is my friend and helped me a lot once, the details you can find in My Biography. Therefore, please, be respectful to the old Dragon, he didn't do you any wrong at all! 
MIGHT and MAGIC VII
First Steps
Page 2
The Emerald Island (continued)
The Dragon Cave
When you'll have in your possession the contents of all chests, there will be one more thing to do - visit the cave of the Dragon who lives on the Emerald Island. You need things that are lying in this cave. That's all. You don't need to kill the Dragon himself.
By the way, he is my friend and helped me a lot once, the details you can find in My Biography. Therefore, please, be respectful to the old Dragon, he didn't do you any wrong at all! 
It is known that there are players who advice to kill this Dragon and you can get a lot of instructions how to do this on different websites.
Still, I don't advise you to kill this Dragon for simple enough reason that you have not four characters in the party, but only one. There is actually no big sense in killing him, don't believe stories about treasures with hundred thousands of gold and piles of invaluable artifacts.
What you need to do before going in the Dragon cave, and actually before any battle on the island at all:
1. Visit the pedestal with the spell "Day of the Gods", which is on the hill near the cannon behind the Dragon cave. This pedestal increasea all statistics nearly twice and among them the most important for you - life! This pedestal is the "must visit" place before each battle!
2. The well near the Tavern that gives you +50 fire resistance.
3. If you don't have the max level of hit points be sure to visit the Healing Tent fountain that restores your life strength (hit points).
4. There is the pedestal near the Dragon cave with the spell "Fire resistance" that gives you +20 increase.
After all these preparations enter the Dragon cave.
Remember, your goal is not to fight but to be quick and accurate. You must run really fast round the cave, ducking from the fire flames of the Dragon who is really irritated with this disturbance of his afterdinner nap (wouldn't you be in the same mood on his place?).
When you'll nearly cover all ground in the cave, turn around and run to the exit. While running don't forget to collect everything you'll see. Picking up is the main reason why you came in. Especially pay attention that you'll get the bow (most important!) and the shield, which will gain you  1000 gold as an evidence.
Temple of the Moon
There you'll be greeted (oups! wrong word!). ok, met by Rats, Bats and Spiders. Don't be afraid, it isn't Fort Boyard, they are not real, they are virtual and you don't have to touch them, only to kill, and they are not that hard to kill either! If you hate to be in one cave with them, you can speed the process of clearing out the passages  by using the Fireball wand expropriated earlier from the late Mr. Malwick.
ATTENTION: When you'll receive  the proper congratulations for winning the contest and will be ready to leave the Emerald Island for good, do not forget to take extra free skill points that are waiting for you in the Challenge on the hill near the Town Hall.
Harmondale
When you sail from the Emerald Island you'll get to Harmondale, the estate not wanted by anyone and  auctioned by this extraordinary way of contest. Now you're the new Lord/Lady of Harmondale, and you'll arrive you will find out why nobody want to have Harmondale. It becomes practically the home town of Goblins who occupied the whole territory of your new estate. Your offended feelings are understandable but, please, keep a cool head and do not rush into the battle with the invaders at once!
You know the saying that the vengeance is the meal to be served cold, don't you? So, checking out all the details and preparation are essential for the success of the deal not only in the real world but in the world of Might and Magic too, one more evidence that the game was done by very clever people!
What you need is to find the Stables.
The system of stables (apart from ships, but they are for the water, remember?) is the main communication system on the continent. That is the natural way of transportation, though, of course, there are other, magical  means too, but they are for later.
ByTheWay: The complete schedule of stables and ships you can find in the Reference Section.
Stables are good not only for transporting you from one place to another but for the collecting horseshoes, which are used not for luck but for increasing skill points of you Hero (the same way as in MM VI, i.e. by clicking with a horseshoe on the portrait of the Hero).
So, don't forget to pick up all lost horseshoes in the Stables and after this book a passage to Tularean Forest.
ATTENTION: Collect horseshoes in every Stables on the continent!
Tularean Forest
This is the place of Elves who decided  that the snow island of Vori is too cold for them and ran away to Antagarich.
What did you forget there? Actually, a lot!
1. Take two quests:
~ the one connected with Faerie King of Avlee
~ Ranger quest
2. Learn some skils (the whole list of the most important skills for Druid is at the beginning of the section Tips and Warnings, skills for the Knight are in the separate Knight section.
3. There is some money to find.
4. Collect some stuff, specifically:
~ blue mushhrooms that give you 50 spell points when you put them in a bottle and flowers that will be transformed by your capable hands into the healing potions; both of them could be found aplenty on the hill behind the Stables.
~ ore (extremely important!), that could be found this way: if you stand facing the sea in the center of the town and you have hills on the left from you, then find a passage down to the obelisk. Ore will be around the obelisk.
~ horseshoes in the Stables 
After you'll do all the above in Tularean Forest, get to the road that leads along the town through the ancient wood in Avlee. The journey will be long, your Hero will definitely want to eat, so don't forget about provisions.
ByTheWay: Provisions can be bought in the Tavern for money or you can follow the vegetarian menu and collect free apples from the trees, but wait until they be ripen, don't eat the green ones - it's very bad for your health! One apple gives you +1 food. To feed your Hero you just click right mouse button with apple on your Hero.
Avlee
This is also the land of Elves but more sofisticated Elves as they insist on calling themselves the Grand Elves, not the Wood Elves as their neighbors are known. The difference is very subtle and is evident only to the Elves themselves, so, don't pay attention to this.
In Avlee find the King place and speak with His Majesty. He will give you a thing that will be an evidence of your actual audience with Faerie King of Elves.
After visit to the royalty, go down by the elevator and check out the King's cellars. There are Dragon Flies there. Be careful, you remember how nasty they can be. Here they will be a little bit tougher. Call them off by one from the main group, and kill them. You will find the Faerie Key in the most last room, with the tree in the center, there is a secret room. You will find it this way:
When you will enter the Tree Room, turn to the right, till the next turn right again, and as soon as you will be about to turn, turn to the right wall near you. Click on the wall, until a secret niche will open. Click on it, and then further along the passage a door will open.
After Avlee return to Tularean Forest and provide the evidence of your audience to a person who gave you the quest. You'll receive some payment for your trouble.
Little voyage round the neighboring lands
ATTENTION: Don't forget to learn Merchant skill in Tularean Forest and become expert Merchant. Also train your Hero till the max level there, it will give him/her extra skill points.
Time to visit the land of undead Deyja, though you'll be there only for a minute just to pick up a horseshoe in the Stables and immediately return back to Tularean Forest.
Next in the list is a sea trip by a ship to Bracada Desert. There your goal is to collect as much ore as you could possibly find and carry on yourself (and your three luggages). Ore is scattered all over Bracada.
Don't forget about the horseshoes! (sorry, I repeat myself, you know this by heart already, aren't you?)
When you'll be loaded with ore as a mule, go to Erathia.
What to do with all this ore in Erathia
Erathia is the land of humans, so you probably will feel as at home there, though, maybe not...
There is a lot of workshops in Erathia where your ore can be made into some very useful objects, such as: armor, weapon and items (rings, amulets, helmets, staffs, etc.). There is master Maker for every kind of objects.
ATTENTION: Always make a save of the game before entering the shop, that you'll have a possibility to reload if you'd not like what the master will create from your ore!
Go to Armor Maker and make an Armor for your Hero from the ore you have painstakingly collected all over the continent.
ATTENTION: Remember, that Druid can wear only Leather armor, so there is no sense to make a chain armor for him/her. The best leather armor is in blue color, so reload the game to your preentering save till you get what you want. If in the first three armors that the Maker will do there will be no your blue armor, reload and try again.
After the Armor Maker shop go to Item Maker. Item Maker can create wonderful things too when she is in a good mood. Be patient and wait until she'll do a really good item with the special magical ability.
Then there is a turn for Weapon Maker. He will strain your patience too, as you need to receive the good mace and good dagger, and he isn't always paying much attention to what he is doing. The good dagger will be hard to find in the nearest future for you, so save and reload is the main tactic here.
When everything will be done, put new equipment on your Hero.
The remaining ore could be used for creating armor that will be sold for money. You'll get about 6,5 - 9 thousands gold this way.
After Erathia go to Avlee and buy the best bow there. As the Elves are the natural marksmen, they make the best bows on the continent.
Best Bow Shopping
When you finish all these traveling it will be time to return to Harmondale and show all these Goblins who is the Lord/Lady of Harmondale.
The rest of the game isn't described with so much details as every player takes his/hers own route of passing though the quests and locations.
However, one must pass them in order to finish the game. You can find a lot of advices and strategy suggestions in the next section 'Tips and Warnings'.
In Erathia don't forget to better your Bow skill till the expert level.
All unnecessary equipment is to be sold (but only after you'll have the expert Merchant skill, otherwise you'd lose a lot of money in a bargain).