The Fungal Caves are a three level dungeon branch below the Animated Forest. All levels are cavernous and contain herbs. The final level has a river and a special fungoid-spawning pool. The fungoid overlord, located on the final level, drops many valuable mushrooms as well as either the Cornucopia or the Horn of plenty.
Fungoids are found on all of the levels, although there are some random monsters as well. Mushrooms can only be acquired by killing fungoids. All levels are cavernous, feature herbs, and do not allow teleportation.
The boss of the area is found on top of a special pool on the final level. It is accompanied by four fungoid sporecasters, and further fungoids will begin spawning once it steps off the pool. As more fungoids spawn from the pool, they will be generated at higher and higher levels. The pool does not generate fungoids if a monster or the PC is standing on it, and otherwise functions like a normal pool, eventually disappearing if the PC drinks from it a sufficient number of times.
Thrundarr's second quest can be completed by visiting the Fungal Caves. No quests require visiting them.