"Don't you see yon bonny, bonny road
That lies across the ferny brae?
That is the road to fair Elf-land
Where thou and I this night maun gae"
Thomas the Rhymer, traditional.
Having introduced trolls and shape-shifted humans into the story it seemed to be no great leap to introduce elves. My elves are neither the whimsical creatures of Victorian nursery tales, nor are they the noble, sometimes comical and yet slightly distant beings of Tolkein's Middle Earth and subsequently of much of modern heroic fantasy. I think they are closest to Alan Garner's Lios Alfar, which are drawn from Scandinavian sources and are very distant from humans, who they despise because of pollution. But I too have looked back at the traditions and have drawn my own conclusions.
There are not a great many sources that have much to say about the elves of Anglo-Saxon myth. The poem Beowulf lumps them together with devils and monsters in one line, which does not speak well of the way in which they are seen. The same fear and repugnance can be seen in the semi-magical remedies of Bald's Leechcraft, which includes a spell against Elf-shot, which seems to represent any illness in humans or livestock which strikes out of nowhere rather than a specific malady. Elves were thus seen as being creatures who were pitiless, spreading illness and misfortune. Bertred voices his repugnance the most when they are confronted by Gamol in the hills south of Jeddart. His brothers share the same culture (more or less) but it seems that it is Bert who speaks for them, being very careful with his words, and being incredibly polite, using formal language and nice titles for the other-worldly being.
Gamol is a high elf, lordly and well versed in magic, able to see things from afar, aware of the plight of the brothers, but most importantly only distantly relating to it emotionally. The affairs of men are of little consequence, but his curiosity is piqued and he furthermore has been troubled by some riddles that he has collected - presumably in other moments where his ennui has been overcome by the lure of the interesting. He has no desire to harm the brothers, but nor is he interested in helping them. Indeed, although he offers to give them some help if they can explain his riddles, he also threatens to make things very bad for them if they do not.
I did not want to have the elves to be particularly understandable, nor the land in which they live. Mist seems to have a connection with entering their world, but later in the book a rather minor elf makes his appearance and it seems that he is wholly in the real world; he even has a little local knowledge. When Frith asks his brothers what an elf is after meeting Gamol, they do not give an answer, although Edgar gives a guess. Edgar's guess is derived from the story of the Voyage of St Brendan, where at one point the saint encounters islands of birds who had been among those angels who neither rebelled against God with Lucifer, not aided the loyal angelic host in their struggle against the upstart. When Frith turns the question to the nature of the old gods followed by the Anglo-Saxons, Edgar becomes more defensive and the speculation ends. Edgar is the one who is most close to an understanding of Christianity, having been partly raised by Bishop Paulinus, yet he still does not understand Christianity, he just likes the stories.
Unlike Trolldom, which has a real presence in the world according to the book, Elfland is definitely Other, although it lies closer to the real world at some places than others. Although Gamol's Path is marked on the map, his hall is not. The lines quoted above suggest that the road to Elf-land can be discovered (it is revealed along with a road to Heaven and a road to Hell). Tam Lin is found by Janet at Cartershaugh, Thomas the Rhymer encounters his elven queen near Erceldoune.
So those are my elves: not quite as evil as the Anglo-Saxons seem to have seen them, yet not creatures of nobility and goodness either. They are alien and the concerns of their perilous realm of Elfland eclipse their occasional passing interest in the mortal world. If it suits them they can be helpful to mortals, but they would be just as happy to harm or hinder them. Potentially the equal of angels, they have no joy, no real purpose and the hint of an alliance with, or being in thrall to the lord of Hell. Gamol makes a passing reference to the Teind. This is a feature of Borders' lore that is seen in both Thomas the Rhymer and more urgently in Tam Lin. Both of these characters are enticed into Elfland and they seem to prosper there, but whereas the fairy queen seems to want to protect True Thomas, poor Tam Lin needs the intercession of his mortal lover Janet to save him. The Teind (another word for a tithe) is exacted upon the elves by the devil. They are allowed to make up the numbers with trapped humans - either enticed in as adults like Thomas or exchanged in the cradle for a fairy child (a changeling). If there are not enough humans to fill the Teind then they seem to have to offer up some of their own folk instead. It would seem that the changeling, although it meant the temporary loss of a child, was preferable to them to the permanent loss of the same child in this way.
There are some interesting Northumberland tales of elves who are very unlike the fairy elves of Victorian stories. These elves are fierce, being roused to chase a lad who rides his horse three times widdershins (anticlockwise) around a quarry which they have made their home; they are caring, leaving a child with a poor farmer with instructions to anoint his eyes daily from a pot of eye ointment - which of course he uses on himself to his detriment; they are cruel but loving of games, carrying away children which have to be ransomed back with gifts that are the answers to riddles. These fierce and cruel - yet occasionally noble - creatures are all additional sources of inspiration for the elves that you meet in the Adventures of the Billy Goats Gruff.