Zounds was a large dog owned by Alitha and Shiri. In order to make him seem more fierce, they referred to him as Zounds the Hell Hound and claimed he bit off Shiri's tongue. In part because of this, Zounds resembled a clichéd villain from the stories told by storytellers.
Zounds, Shiri, and Alisha had drinks at the Severed Paw on the day that Grayling Frimlish came to Vadhoc. When they heard Vislor Turlough and Frimlish talking about the Fifth Doctor, they assumed the Doctor to be the Storyteller and took Turlough and Frimlish hostage. Zounds disarmed everyone in the pub.
After the Doctor became involved in the situation, Frimlish revealed himself to be the Storyteller. Upon the request of Shiri, Alitha, and Zounds, Frimlish told a story with them as the heroes. In the story, Zounds was a genius who was transmogrified into the body of a wolf by a beautiful witch. This fictional Zounds sought out the Ancient Moles of the Forbidden Valley to return to his human form. (AUDIO: The Last Fairy Tale)