The Slags's underground digs
Northern section of the caves, where Jonny and the Slag children are located.
I was a peaceful farmer that worked the fields as hard as any man -- until they started showing up at night. All glowing, with pasty white skins... Spooked the hell out of me, it did. Night after night they showed up and stole crops and cattle alike; I could do nothing to stop them.”— Karl
The Slags are the descendants of a group of secret militia officers who sealed themselves underground and slowly mutated. Few can bear to be on the surface or stand the bright light of the sun. The Slag population steadily increased since the Sealing. It soon became apparent that they could no longer survive underground without further supplies. So the Seal was broken, and they once again looked to the surface for survival, creating a small farm some years prior to 2241, which to the people of Modoc looked as if the farm appeared out of nowhere.
A group of Modoc's inhabitants were out hunting when they noticed the new farm. Soon after, some of them got together to visit their new neighbor, but they didn't find anyone there. After many months of trying to contact the owners with no success, it was decided that the farm must have been abandoned soon after it was built. So instead of letting the crops rot in the fields, young Karl moved in.
To get rid of the intruder, the Slags, who were not a violent people by nature, came up with the ghost idea, smearing themselves with glowing fungus. After some time, Karl started to tell stories of seeing strange glowing figures tending the crops and feeding the animals at night. The other people of Modoc all laughed at him, thinking he was making up stories. Then one day Karl stopped coming into town.
When the people of Modoc came looking for him, they found bodies, some crucified, while others were left to rot out in the sun. In reality, the bodies were merely props the Slags manufactured to scare off those who try to steal from them, mostly brahmin guts and dummies. While the inhabitants of Modoc believed Karl to be dead, he only escaped to the Den.
Unfortunately, this has been a little too effective. Around 2241, the Slags were seeking to make contact with the surfacers, but no one came to the farm anymore for fear of the ghosts.
The Ghost Farm and the Slags appear only in Fallout 2. It is unknown whether the Chosen One helped establish good relations between Modoc and the Slags, the people of Modoc continued to consider the place haunted or simply wiped out the Slags in what they considered revenge for Karl's death.