"What did they tell you they want the armor plate mail for? A treasure for Rhuargh? A ransom for a lost kobold princess?" -- Naddur Ban Dok
Kobolds are a race of humanoid beings who live underground in Betrayal at Krondor. They can first be encountered in Chapter 2.
The Kobolds knew Rhuargh, the dragon who lived in the mine. When the party approaches their pit on the mine's second level, a Kobold clambers out of it and asks for a suit of Grey Tower Plate armor, explaining that the Kobolds believe the dwarves caused Rhuargh's disappearance and they have decided to bribe King Dolgan into releasing it. Naddur ban Dok later scoffs that the Kobolds are playing a joke on the party at the dwarves' expense, since Grey Tower Plate cannot be obtained near this side of the Cadal.
The party can return to the pit with Grey Tower Plate and ask the Kobold who emerges for something in return. The Kobold calls instructions down into the pit in a language the party doesn't recognize. Almost an hour later, several young Kobolds emerge with a metallic goblet from which each party member takes a sip, gaining +5 Health and Stamina.