Since it was Doug's turn to GM, but he couldn't make it, we played D&D.
The Three Paladinos continued to explore the dungeon, while Doug's cleric headed back to town to rest and recuperate. They found a spiral stair down and descended into the first underground level. The first thing they encountered was a chamber with a glowing pool and a book on a pedestal. From the tales back in Paladin Academy they recognized these as a healing pool and a Shrine of Memory (aka a Save Point). They triggered the shrine and the book floated up and opened in a burst of light. Glowing runic script invited them to record their names in the the Book of Valor. They did so, thus ensuring that as long as at least one of them survived to return to the book, the others could be brought back.
They proceded onward, into the stygian gloom.
After lighting a torch to make the gloom less stygian, they started poking around the suprisingly spacious network of corridors. Following the right-hand rule, they explored and defeated: a Krenshar (a hideous cat-like thing which peels the skin of its face back revealing a bloody skull and emitting a howl that casts Fear)–Wendy's Paladin stood her ground while the other two turned tail and bravely ran away (She excecuted a fighting retreat until her companions recovered and came back to help). A pair of Zombies, who for some reason had an unstrung loom in their room. A giant ant, surprisingly nimble and yet ineffective with its mighty mandibles.
At this point in the proceedings the trio had accumulated enough experience to Level Up (sfx including being bathed in light, a triumphant musical flourish, and levitating slight off the ground while the camera pans around them). Newly empowered and restored to full health and magic, they proceeded to fall into a forty-foot pit and there had to wrestle with a Giant Centipede. They defeated the centipede and we broke for the night.