Dwarf Quest is a third-person, isometric dungeon crawler reminiscent of games like HeroQuest or Cadaver. The game takes place in the dwarven kingdom of Rockholm. Every year, a contest in held: five of the bravest dwarves descend in an underground maze called the Foundry, and the winner is the one who reaches the exit first. The player takes the role of Morrin Firebeard, one of the contestants. But as Morrin explores the Foundry, he finds the dead bodies of the other dwarves, and realizes something evil is stirring in the depths of the earth.
The player must explore a series of dungeons, collecting gold and equipment allowing him to survive the dangers of the maze. Combat is turn-based, and uses a system of action points. Any action (moving, attacking) costs a point, and any unused point is added to Morrin’s defense against enemy attacks. The dungeons are often puzzles in themselves, as the player will have to find hidden keys and levers in order to reveal the path to the next level.