Where do I find the sleeping dust?

You need to get it from the squirels in the highlands. talk to them about the corn, them go to to lowlands and speak to the poep[le htere. 1 of the women will send her men to fight the squirels. go back to the squirels and talk to them, then leave and go right back in. You tell them you'll join them and they show you where the dust is. You have to give them something first. they may want the statue of lionel (which the elves want as well) but you can give it to them.