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Wikipedia article

This article is about an older version of DF.

Iron is found beyond the chasm in the form of hematite ore, which can be processed at a smelter to make iron bars.

Iron is predominantly used to forge weapons and armor, which deal (or absorb) more damage than those made from bronze or copper. Iron is the most commonly used of the three metals used to forge anvils (steel and adamantine are harder to obtain, but the anvil does not become more useful). Iron can also be fashioned into objects such as coins, furniture, and crafts, though this is normally regarded as a waste of perfectly good metal.

Iron bars can be used to make pig iron, which in turn is used to make steel bars.