Trebor was a mad overlord who went off on the deep end after acquiring a magical amulet of immense power. The amulet ends up being snatched away from Trebor by his arch nemesis Werdna. Werdna was not sure how to properly use the amulet, only to accidentally cause an earthquake which creates a newly formed ten level dungeon under Trebor's castle. In order to avoid the embarrassment, Werdna declared that the dungeon system is Trebor's new lair for his monsters. Trebor on the other hand, declared that the dungeon system will be his new proving grounds for adventurers to prove their worthiness of becoming Trebor's new honor guards. Hiding the actual truth from Werdna that these adventurers will be instructed to steal back the amulet for Trebor.
—J LeGault