The legend of Sigurd and the treachery of Regin begins not with a hero, but with a curse born of gold and the folly of gods. In the elder days, the gods Odin, Loki, and Hoenir traveled through Midgard and accidentally killed a shape-shifting dwarf named Ottr, who was fishing in the form of an otter. To pay the blood-price to Ottr's father, Hreidmarr, Loki was forced to seize a vast treasure from another dwarf, Andvari. Among this hoard was a magical ring, Andvaranaut. Andvari, filled with spite at the loss of his wealth, placed a terrible curse upon the gold and the ring: they would bring death and destruction to whoever possessed them. This curse immediately took root in the house of Hreidmarr. His sons, Fafnir and Regin, demanded a share of the gold. When Hreidmarr refused, Fafnir murdered his father in his sleep. Driven by a greed so profound it transcended the natural world, Fafnir drove his brother Regin away and retreated to the wastes of Gnita-heid. There, his internal corruption manifested physically, and he transformed into a massive, venom-breathing dragon, lying atop his hoard to guard it for eternity.
Regin, however, did not forget the gold. Being a master smith of the dwarven race, he was patient and cunning. He lacked the physical strength to challenge a dragon, so he sought a proxy—a champion he could mold and eventually discard. He found this champion in the young Sigurd, the posthumous son of the great King Sigmund of the Volsung line. Regin became Sigurd’s foster father, teaching him many skills: the carving of runes, the speaking of many tongues, and the handling of weapons. Throughout Sigurd’s youth, Regin constantly goaded the boy, telling him tales of the dragon Fafnir and the stolen inheritance that rightfully belonged to Regin. He played upon Sigurd’s noble lineage, suggesting that a true Volsung would never allow such a monster to live. Sigurd, being of pure heart and high courage, eventually agreed to slay the beast, but he demanded a weapon worthy of the task. Regin forged two swords for the youth, but Sigurd broke both against an anvil, finding them brittle and unworthy. Finally, Sigurd brought Regin the shattered pieces of Gram, the sword of his father Sigmund, which had been broken by Odin himself. Regin reforged the blade, and this time, the steel was so sharp it could slice a lock of wool floating in a stream and so strong it split the smith’s anvil from top to bottom without dulling the edge.
With Gram in hand, Sigurd rode to Gnita-heid. Under the advice of a mysterious old man—who was Odin in disguise—Sigurd dug a series of trenches in the path where the dragon crawled to find water. As Fafnir passed over the trench, Sigurd thrust Gram upward into the dragon's heart. As the beast lay dying, it warned Sigurd that the gold was cursed and that whoever urged him to do this deed intended his ruin. Fafnir's dying breath carried the weight of prophecy, yet Sigurd remained uncertain of his foster father’s heart. When Regin emerged from hiding after the dragon was dead, he showed a strange mixture of relief and predatory hunger. He did not congratulate Sigurd as a father would; instead, he acted as a master toward a servant. Regin cut out Fafnir's heart and told Sigurd to roast it for him while he slept, claiming the dragon’s blood and flesh held great power. Regin’s plan was nearing its end: he would eat the heart, gain the dragon's wisdom, and then kill the exhausted Sigurd to keep the hoard for himself.
As Sigurd sat by the fire roasting the heart on a spit, he touched the meat to see if it was cooked. A drop of hot dragon blood scalded his thumb, and he instinctively put the thumb into his mouth to cool the burn. The moment the dragon’s blood touched his tongue, the world changed. The cacophony of the forest transformed into coherent speech; Sigurd found he could understand the chatter of the nuthatches perched in the trees above him. The birds were discussing the very scene before them. One bird chirped that Sigurd was a fool for roasting the heart for another, when he should eat it himself to gain supreme wisdom. Another bird warned that the smith Regin was even now plotting to murder the boy to secure the gold. A third bird was the most direct, saying that Sigurd should strike off Regin’s head and take the treasure for himself, for Regin was a 'treacherous dwarf' who cared nothing for his foster son.
Sigurd listened to the birds and looked at Regin, who was pretending to sleep but was actually clutching his sword, Ridill, waiting for the moment to strike. The realization hit Sigurd like a physical blow. The man who had raised him, who had taught him his letters and his craft, was nothing more than a parasite fueled by the same greed that had turned his brother into a dragon. Sigurd saw the cycle of the curse clearly: Hreidmarr killed by a son, a brother betrayed by a brother, and now a foster father seeking the life of his ward. Sigurd knew that as long as Regin lived, the treachery would continue. Drawing the reforged Gram, Sigurd stood over the smith. With a single, swift stroke, he beheaded Regin, ending the dwarf’s long-standing plot. The blood of the smith mingled with the blood of the dragon on the dark earth of Gnita-heid. Sigurd then ate the dragon’s heart himself, gaining the promised wisdom, and loaded the treasure—including the cursed ring—onto his horse, Grani. While Sigurd left the site as the greatest hero of the north, the curse of Andvari followed him still, for though he had escaped Regin’s blade, the gold would eventually bring about the tragic end of the Volsung line.