Elves are intelligent humanoid creatures who live in forest retreats. They are one of the races playable in Adventure Mode. Their retreats have no buildings, but the trees in the area are named. They love nature and are ready to defend it, typically with bows. They may invade a fortress which violates their tree-cutting limit.
 Elves in Fortress Mode
They are very picky about what they will accept in return: Elves will not accept anything made from or decorated using a previously living creature (bone, shell, leather, horn, ivory, meat, fish, tallow, fat, or soap) or wood (including charcoal, ash, lye, potash, pearlash, soap, clear and crystal glass items, and obsidian short swords). Even offering them something wood-related will make them immediately pack up and leave.
Metal items are acceptable, even when charcoal is used in their production. Items made from silk are acceptable, as are all non-wooden plant-based products such as plump helmets, seeds, and ☼Dwarven syrup biscuits☼ (as long as no animal products were used in the recipe). You can also transport your goods to the trade depot in a wooden bin, as long as you do not try to sell the bin. In order to sell food and booze, however, your barrels will need to be made of metal. Living animals are acceptable, as long as the cage or trap is not made of wood.
Once the Baron noble arrives in your fortress, an elven diplomat will accompany the caravan. If you have cut down lots of trees (which is rather likely on a standard map) he will first warn you and then try to negotiate an annual quota on your woodcutting activities. Note that growing tower-caps does not exempt you from the woodcutting quota; evidently, elves don't like you cutting down giant mushrooms, either. Your remaining quota is viewable on the ivilizations menu; select the elves, and hit tab a few times to cycle through the available information. The quota counts down towards zero as you cut more trees.
If your ignore their demands, the peace-loving elves are all but too happy to take up arms. While they consider it barbaric to harm living creatures for food or craft, they consider it perfectly acceptable to massacre sentient dwarves and their pets in ambush. Being that they're all highly skilled markselves, you'll be in for a world of hurt. Just a handful of markselves will appear and start mowing down anything they see. However, it isn't a siege, and after a certain amount of damage is done, they'll leave the map, leaving you to deal with the aftermath of their hippie carnage. Unless you have some highly trained marksdwarves of your own, your best move is to simply get everyone inside the fortress, as you'll not be able to get them out of the open and inside the fort where dwarven prowess would have the advantage.
 Elves in Adventure Mode
Elven forest retreats are represented by yellow symbols in forests on the world map. They do not have any shops, but they seem to have a great amount of elite marksmen to recruit. The leader and quest giver of a retreat is called the "druid", who can be found wandering the forest floor with the other elves.
Elven characters start with a wooden weapon and a set of basic wooden armor. This limitation often leads to a quick death. They do have some advantages, however: they're one size larger than dwarves, which makes them hit harder and absorb more damage, though they also have a natural armor penalty which causes them to take slightly more damage than normal. Their main redeeming quality is their speed, being roughly 20% faster than the other playable races.
[CREATURE:ELF] [NAME:elf:elves:elven] [TILE:'E'][COLOR:3:0:0] [SPEED:700][GRASSTRAMPLE:0] [GENPOWER:3] [BUTCHERABLE_NONSTANDARD] [INTELLIGENT] [CANOPENDOORS] [PREFSTRING:grace] [BODY:HUMANOID:2EYES:2EARS:NOSE:2LUNGS:HEART:GUTS:ORGANS:HUMANOID_JOINTS:THROAT:NECK:SPINE:BRAIN:5FINGERS:5TOES:MOUTH] [NARROW] [DAMBLOCK:-1] [SIZE:7] [ATTACK:MAIN:BYTYPE:GRASP:punch:punches:1:2:BLUDGEON][ATTACKFLAG_WITH] [ATTACK:SECOND:BYTYPE:MOUTH:bite:bites:1:1:GORE][ATTACKFLAG_CANLATCH] [CHILD:12][BABY:1][MULTIPLE_LITTER_RARE] [FAT:1] [EQUIPS] [DIURNAL] [SPEECH:elf.txt] [STANDARD_FLESH] [HOMEOTHERM:10067]