They take the Kobold Bounty quest hook, and so proceed through Areas 1 and 2 before taking an extended rest and dividing up the 60 gp, daggers, slings, and spears. Area 3 is a full day’s adventure, after which the wizard takes the 50 gp ruby, the halfling and shifter each take a 25 gp garnet and 25 gp, the warforged takes 50 gp, and they divide up the shields, daggers, javelins, and slings. Area 4 is another full day’s work, giving the party the bone mask they sought, a +1 staff of the war mage for the wizard, more shields, daggers, slings, and a spear and short sword. They make note of the dragon in Area 5, but return to Fallcrest for their reward and maybe some help.
All this gives them 831.25 XP each, as well as an extra 290 gp. Victor and Dannad each take 95 gp, while Cliff takes 100 gp. In Fallcrest, they purchase more equipment, accept the Dragon Hide quest hook, and find two more adventurers, Aelar the shaman and Brinjin, a secondary rogue. Cliff will remain in Fallcrest and explore further options, while Aelar takes lead of the party back to Kobold Hall to confront the dragon.
Before leaving town, however, Cliff visits the Temple of Erathis to discover a modified version of the Ominous Signs quest hook from H1 Keep on the Shadowfell. He brings the party to meet with Dirina Mornbrow / Marla, and they decide to let him collect a new group of adventurers to travel to Winterhaven. Party 1 then finally departs for Kobold Hall.
Arriving back at Kobold Hall, they confront and defeat the dragon, obtaining the sought dragon hide from its treasure chest, along with a +1 lifedrinker longsword, a 20 gp pearl, and 100 gp. Victor takes the sword, Dannad accepts the pearl and 20 gp, with 40 gp each going to the new characters Aelar and Brinjin. The XP divide up to 150 each, and the party concludes the Kobold Hall adventure, holding on to the dragon hide to eventually collect the reward from Fallcrest, but meanwhile heads to Winterhaven to meet their friends.