This well vegetated and beautiful valley is a short distance to the west of the village Holmavik. Lake Thidriksvallavatn has an area of 1,45 km², is 47 m deep and lies 73 m above sea level. It is a reservoir for the Thvera Power Station and its level fluctuates (6m). Two abandoned farms are at the western end of the lake (Thidriksvellir and Vatnshorn). The discharge of the lake, River Thvera, empties into the Steingrimsfiord Bay and the power station is on the property of the abandoned farm Skeljavik. A relatively good road lies to the lake and 4wd vehicles can drive all the way to the abandoned farms. The lake abounds in lake char and brown trout, caught mainly with flies and spinners. Tradition has it, that reverse finned fishes and a monster occupy the lake as well. The surroundings are peaceful and relaxing and the valley offers an excellent berry picking area during autumn (fall). Three rocky mounds, Smidjuhusaborg, Tittlingsborg and Storaborg, decorate the landscape south of the lake and in front of them is still another one, Hesturinn (The Horse), which looks like a horse with a rider from the old farm sites.
The abandoned farm Thidriksvellir is situated on the southwest corner of the lake. According to some legends, Steingrimur trolli, the first settler, built the original farm there for his workers, who were to watch over his bulls. The farm was named after one of them and several topographical names remind us of his bulls, such as Nautahjalli (The Bulls’ Ledge), and Nautadalur (The Bulls’ Valley). The land register of 1709 mentions the outlying farm Smidjuhus, which probably was abandoned after the middle of the 18th century. Ruins of houses were also discovered at Grimseyrar near the edge of the gorge Grimsgil. The construction of the Thvera Power Station caused the rise of the lake’s water level and the flooding of the greatest part of the fields of the farm and a part of the road.
The abandoned farm Vatnshorn is situated in the slopes on the northwestern side of Lake Thidriksvallavatn separated from the Thidriksvellir property by River Thidriksvallaa. A myth tells us about a ghost, which followed the farm’s family. This ghost, Pjakkur, was wicked and was seen by clairvoyant and common people. It carried a large wooden stick with a pointed iron end and always struck it down in front of it when travelling and made a sound similar to striking ice. Whenever this sound was heard, people knew, that someone of the Vatnshorn family was nearby. The land registry of 1709 mentions the outlying farm Skerpingsstadir on the Vatnshorn property, and the ruins, which were still obvious at the time. The farm Vatnshorn was abandoned in 1951, shortly before the power station started operating.