Stab!  with the first dagger, into the elf and finding something vital.  There's a choking sound, and the elf falls to the ground.  Elf 4 is dead.

Round Two:
Telias
Elf 5
Nalla
Elfs 1 and 3
Verdan, Mr Fists and Sunshine (in any order)

Telias is up.

Telias stands up and takes two steps toward the nearest elf. "Talking was also an option." He says as he swings out with his staff.

Attack: 17 Damage: 4

Elf 1 takes a staff to the face.  It seems to hurt quite a lot, but they're still up.

Elf 5 is looking nervous, with two of their comrades down and Telias back on his feet.  They shoot at Mr. Fists:

Attack: 4 Damage: 5

It's a misfire, the bolt slamming into the floor just in front of the startled elf.  They seem ready to bolt.

Nalla is up.

Nalla will move toward the door, moving her hands through the beginning of Firebolt once more. As she takes her finally step she points towards the heavily injured elf, letting the cantrip go.

Firebolt: Attack: 13 Damage: 7

Elf 1 erupts in flame as the bolt strikes them; they scream, and fall.  Elf 1 is dead.

Elf 3 is backing away, firing a bolt at Sunshine as he goes:

Attack: 9 Damage: 6

But misses badly.

Verdan, Mr. Fists and Sunshine are up, in any order.  Two enemies remain, both looking ready to start running.

Oh, leaving so soon? Sunshine draws her short bow and nocks an arrow. What a shame. She'll ready her action in case one of the elves attacks - and fire her arrow at them. If they choose to flee, she won't shoot.

"Knock out, get them to talk," Mr. Fists  says. He will run up to Cloaked Elf 3 and use the pommel of his short sword to deal non-lethal damage.

Sword attack - Attack: 15 Damage: 8

Bonus action unarmed strike - Attack: 24 Damage: 6

Mr Fists knocks Elf 3 unconscious.  Only Elf 1 remains.

Verdan is  up.

Verdan step into the hut, assessing the situation quickly he draws his shortbow, knocking an arrow but not drawing. He calls out to the remaining elf,

"You're all alone now. Perhaps now would be a good time to talk and we might..." He reiterates, "MIGHT see fit to let you live, unlike your companions here."

15 (Generic D20 roll, intimidation would be +3, persuasion would be a +5. I'll let you as the DM make that call)

2

The lone elf remaining looks at Verdan, hesitates, and slowly lowers their weapon, letting it fall to the floor.  Okay, let's talk, they say.

You are out of combat.  You stand in a shop that has been ransacked, and also appears to have been neglected for a while; there's dust on the counter and dirt on the floor that is not recent.  The dead bodies of three cloaked elves lie on the ground, plus one unconscious and one alive and looking warily at you.  There is a door, half-open leading to a room that you cannot see inside from where you stand.  

What would you like to do?

Sunshine growls and swears under her breath as she quickly pulls the crossbow bolt out of her shoulder. Pressing her hand against the injury, she levels a glare at the elf. The hell ya attack us for? she asks. And what're ya even doin' here?

Telias will wave a hand and stop the bleeding of the unconscious elf. Spare the Dying

Mr. Fists will stand by and say a prayer to Rael.

Nalla lowers her staff and lets the magic she had been harnessing fade away, still keeping a close eye on the elf they had just finished fighting.

Doing my job, the elf replies.  For my employer.  Who you've just royally pissed off.  I'd run, if I were you.  That's not a threat, they say hastily, raising their hands, just a friendly warning.  You know.  To a friend.  A new friend.

Telias, the unconscious elf seems to be okay, not bleeding out, but your spell seems to make their breath come easier at least.

"Hmm, seems like he should be more angry at you for failing your task." Verdan look about the shop, "Clearly you were looking for something, but I doubt you found it or else why would you fight. I'd bet we have a better than even chance at finding whatever it is you were looking for. Seems to me that would curry a bit of favor with your... employer..."

He pauses a moment to let the line of thinking set in with the elf. "Now, you can either give us a little more information about your employer and exactly what you were looking for, or we can tie you up at let your employer find you here in the midst of your failure... Sound reasonable right?"

I work for Hulil Lutan.  You don't want to cross her.  Or meet her, if you're smart.  She's sick, right?  Wanted us to find something here that might help her.  We didn't, though.  Just found that statue in the back.  They nod at the door leading to the other room.

Raising a brow at the mention of the statue, Nalla will make her way into the other room. As she does so much like before she will begin the ritual for Detect Magic.

Mr. Fists will stand close to Nalla, but he won't try and get close to the statue or anything.

Nalla, you open the door. What appears to be an ice statue of an elf is bundled beneath the blankets of a bed along the east wall of the room. A small table loaded with dirty teacups and a kettle stands next to the bed.