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The city of Dragonstar is a dismal place wracked by warfare. During War of the Bend'r-mahk, the forces of Skyrim advanced into Hammerfell and invested the city - a situation that still persists during the events of Shadowkey.

Dragonstar is divided into two halves, east and west, with the forces of Hammerfell predominating in the west, and those of Skyrim in the east. Each half has its own government and an atmosphere of deep mutual distrust prevails.

In Shadowkey, each half is treated as a separate zone: