The Skai river valley is a pleasant-sound place, all farms and chimneys and cottages and dogs.  The dogs bark at the zoogs still trailing Carter, but he ignores them.  He stops at a farmhouse and asks the people there if they know anything about Kadath where the gods dance in the moonlight, but the farmers just make the sign of the cross the Elder sign and tell him to keep walking.

Roundabout lunchtime he comes to the city of Nir, which is as far in this direction as he’s ever come before, Lovecraft says.  Beyond Nir he crosses the bridge over the Skai river, and passes into the lands of Ulthar.  He can tell he’s getting close to Ulthar, because of all the cats.  It’s cat cat cat on the far side of the Skai, and in Ulthar, according to an ancient and significant law, no man may kill a cat.  It’s a nice place, is Ulthar.  You’ve got cats, cottages, chimneys, more cats, cobblestones, and stuff that doesn’t start with a C also, like fences and hills.

The cats thin out ahead of Carter, as they don’t like his zoog escort, and he makes his way through the town to the top of a big hill in the center.  On that hill, he founds an ivy-covered stone tower, which is the modest Temple of the Elder Ones where the priests and old records were said to be.  And inside the temple, he finds the old priest who climbs the mountain, just as the zoogs described.

This old priest turns out to be named Atal, and the mountain he climbed was Hatheg-Kia.  Atal’s over three hundred years old, but still spry, and he fills Carter in on what he knows about the gods.

1) The gods in question are just Earth’s gods, which I think means Zeus and Quetzalcoatl and so on, though Lovecraft doesn’t name anyone.  They gave up on Earth, with its industrialization and secular humanism and so on, and moved out to the Dreamlands.

2) They’re jerks.  You can pray to them if you want, and maybe if they’re feeling frisky they’ll answer you, but they don’t want to be bothered.  You’re begging for a smiting, you bother them.

3) So it’s good that nobody knows where Kadath is.  Atal’s buddy (whose name turns out to have been Barzai) got pulled screaming into the sky, just for climbing Known Hatheg-Kia!  Think how much worse the punishment for climbing Unknown Kadath would be!

4) It’s possible for a mortal to get the better of one of Earth’s gods, but they might go complain to the Other Gods from Outside, whom it is better not to discuss.  These gods are the mean grandmas of Earth’s gods.  Just twice, as far as Atal knows, have the Other Gods taken any action relating to anyone on or relating to Earth.  Once they did something that’s described in one of the illegible parts of the Pnakotic Manuscripts, and once they pulled Barzai into the sky and smited the heck out of him.

Carter consults the Pnakotic Manuscripts and also the Seven Cryptical Books of Hsan, but gets basically nothing from them.  He goes back to Atal, and asks him about the marvelous city he dreamed of.  Atal knows of no city matching its description, and is generally unhelpful, saying that it’s not a real city, it’s just something Carter dreamed up (the ontological meaning of this is unclear) or else it’s on another planet and Earth’s gods couldn’t help if they wanted to, and also that since he stopped dreaming of the city so abruptly clearly the gods were keeping it from him.

Carter’s solution: he gets Atal drunk.