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There is a large cemetery northeast of the Tower of Havel. There isn't too much of interest there, but it does hold some key secrets. A lone gravestone to the far right is actually trapped with a poison arrow if you get too close to it. A trio of tomb stones near the very top hide a secret. If you examine the right tomb stone you will discover a very powerful, but very heavy Silver Sword. You should wait until much later in the game when you're strong enough to carry and wield it before locating it.

On the screen that contains the bulk of the graves, look for a trio of stones arranged in an L shape. Examine the lower right stone. If your intelligence is high enough, you will discover that the stone is actually a hidden entrance to a town beneath the cemetery. If not, you will need to fight more monsters and increase your level until your intelligence increases enough.

Equipment store
Equipment List price Weight (g)
Broad Sword 5000 4000
Holy Sword 20000 6000
Arrow 3000 3000
Bow 5000 3000
Bronze Mail 20000 10000
Bronze Shield 5000 10000
Star Helmet 10000 5000
Medicine 50 100
Expensive Medicine 300 100
Camping Gear 200000 5000
Food 250 500
Oil 500 500

The underground city sprawls around, but there are only three buildings that you can examine:

A) Inn
This Inn functions just like the others: it costs 1000 coins to stay there, and staying at least once allows you to instantly transport back to this city via the Move spell.
B) Store
This store sells a lot of expensive, and considerably heavy equipment. While the armor it sells bestows better armor class, it will also weigh you down considerably. There are more effective forms of armor to find. However, you should make purchasing a Broad Sword a priority whenever you arrive.
C) Bank
The bank is worth visiting to establish an account. By doing so, you'll get a bank book, which will enable you to also deposit money in the Forest City bank, depending on which version of the game you are playing. Depositing money in the bank bestows several benefits. You lower your weight by dropping money off there. And for every day that you leave money in there, you earn 1% interest.

The citizens of the Subterranean City don't have a ton to talk about. They mention the warehouse on the side of the city, and how it was built on top of a burial ground. Others talk about a palace that's submerged in the lake. Someone mentions the Scroll of Jeem being located in the Water Palace. There are quite a few mysteries yet to be solved.

There's a guard who stands motionless in front of the entrance to the warehouse in the lower left corner of town. He will refuse to budge or let anyone past him until it's quitting time at 20:00. That forces you to wait until you are quite tired before you can get past him and explore. However, there's a secret tunnel that you can find to access the warehouse at any time of day from the screen above. Follow the edge of the entrance up until you can walk left through a hidden path that leads down into the opening below.

In the warehouse, you'll find five treasure chests. Three are empty, one contains a knife, and one if booby trapped and contains an arrow. After you examine all the chests, it may seem like there's nothing else to do, but the warehouse contains an important secret for you to discover.

The Warehouse secret

The lone chest on the far left side of the warehouse hides a secret. The first time you examine it, it will appear empty. However, if you choose to examine it a second time, you will discover a hidden entrance which leads to a cave below. This is your next destination.