Legends tell of a ghostly hound that roams the treacherous Scragwood Forest at night hunting for prey. Where the creature comes from and what its true nature and purpose are generally unknown. It appears as a great hound, about the size of a wolf hound save that it is certainly no ordinary beast. It glows with an eerie phlorescent blue hue and never leaves any trail when it passes similar to a pass without trace ability. Not even the most skilled of trackers have been able to follow the creature.

The Blue Hound is generally considered an ally to the somewhat feral wood elves native to the Scragwood for it seems to have been known to protect their communities from time to time. The wood elves however claim to have no power or control over the beast and that it operates under its own free will. It is also known to exhibit a great dislike toward evil humanoids, particularly orcs and hobgoblins. It has attacked such creatures on sight without provocation on more than a few occasions.

A number of eyewitness accounts describe the Blue Hound having appeared on nights when the Pearl Moon is full and that the creature charged into a travelling host of hobgoblin warriors passing through the wood from the Fenmarch. The hobgoblins tried desperately to fend off the creature but their efforts were all in vain. Spears and arrows simply passed through the creature's body as if it were incorporeal. It is even described as being some kind of projection or phantasm. However, the humanoids surely felt the Blue Hound's teeth as it left nearly three-quarters of the group dead on the forest floor.

The druids of the Scragwood rarely speak about this creature and generally seem to ignore its appearances altogether. Though surely not a natural beast, the druids are wise enough to leave well enough along and allow the Blue Hound to go about its business. One thing is for sure, the druids have ascertained that the creature is not an illusion or phantasm of any sort.