Niflheim is an extremely difficult endgame zone. It is 3x3 map tiles in size, 8 of which contain demons (as they're called in the manual) who also serve as bosses for said maps. You can reach Niflheim by one of the following methods:
- dimension travel to cyan
- reading a scroll of pure evil (random chance, strongly discouraged)
- entering the one-way staircase at the east bank of River Gioll, right below where Harbard is seen before you attract his attention.
The demons are laid out as follows:
Hela is of particular interest for two reasons: the quest to free Balder's soul, and her scythe which is the best weapon in the game. Resistance to extreme cold is a prerequisite to survive the deathly cold realm(eat a dead ice dragon). Also wear a disperser helm as there's a high chance of finding zardons and you will face Vanseril soon or later.
Any demons left unslain will move to Asgard when the player reaches it and will start bullying the valkyries. They do not need to be slain to win the game, but it's easier to kill them one at a time than potentially dealing with all of them simultaneously.