Schwarz Forest is a forest trenched deep within a valley. It was home to a secluded community of dark elves. However their village was burnt down by the Flame Dragon, killing over 200 dark elves. Those who had survived took refuge deep inside a cave in the nearby Roldom Canyon. Yao Haa Dushi originally came from the Schwarz Forest. As a renown and skilled warrior, the Elvish tribal elders sent Yao to find the "Men In Green" to aid in hunting down the Flame Dragon.
Two months had passed since Yao departed from her forest homeland. Upon her return, she brought Itami, Tuka Luna Marceau, Lelei La Lalena, and Rory Mercury. At first, Itami's group was confronted with a number of hostile dark elf warriors until the untimely arrival of the Flame Dragon forced everyone present to cooperate in order to survive. After a brief skirmish with the Flame Dragon, they were able to retreat deep into the forest and reach safety within the caves. There, the tribal elders and the surviving dark elves welcomed Itami as their savior.
The next day, Itami's group and several dark elf volunteers would then leave Schwarz Forest and head towards Tube Mountain where the dragon's nest was reportedly located to set up an ambush using JSDF weapons Itami "borrowed" from the headquarter base in Alnus.
The world "schwarz" is German for "black". Coincidentally, there happens to be a forest in Southwest German, named Schwarzwald ("wald" is German for forest).