diff --git a/README.md b/README.md
index 3d0e036..a454ded 100644
--- a/README.md
+++ b/README.md
@@ -13,13 +13,13 @@ option           A reply/answer to the text the NPC said.
 precondition/    All listed preconditions have to be true in order for the NPC
 prerequirement   to offer this option.
 
-effect/result    Further effects (like setting variables, handing out items)
-                 selecting a particular option has.
-
 action           An action the player may (or may not) take, i.e. trading,
                  taking an item from the NPC, giving the NPC something, entering
                  the right password etc.
 
+effect/result    Further effects (like setting variables, handing out items)
+                 that take place after the action was successful.
+
 How to configure NPC and add dialogs
 ====================================
 There are two ways:
@@ -134,3 +134,46 @@ If unsure where to put your trades: If your NPC wants to tell players a story
 about what he sells (or if it is i.e. a barkeeper), put your trades in the
 options of dialogs. If you just want to sell surplus items to other players
 and have the NPC act like a shop, then use the trade list.
+
+
+Quest items
+===========
+Quest items can be *created* to some degree as part of the *action* of an
+*option* through the edit options menu.
+
+MineTest does not allow to create truely new items on a running server on
+the fly. What can be done is giving specific items (i.e. *that* one apple,
+*that* piece of paper, *that* stack of wood, ..) a new description that
+makes it diffrent from all other items of the same type (i.e. all other
+apples).
+
+A new description alone may also be set by the player with the engraving
+table (provided that mod is installed):
+	https://forum.minetest.net/viewtopic.php?t=17482
+
+In order to distinguish items created by your NPC and those created through
+the engraving table or other mods, you can set a special ID. That ID will
+also contain the name of the player to which the NPC gave the item. Thus,
+players can't just take the quest items of other players from their bones
+and solve quests that way.
+
+The actions *npc_gives* and *npc_wants* are responsible for handling of
+quest items. They can of course also handle regular items.
+
+If an NPC creates a special quest item for a player in the *npc_gives*
+action, it takes the item out of its inventory from a stack of ordinary
+items of that type and applies the necessary modifications (change
+description, set special quest ID, set information which player got it).
+
+If the NPC gets such a quest item in an *npc_wants* action, it will check
+the given parameters. If all is correct, it will strip those special
+parameters from the item, call the action a success and store the item
+in its inventory without wasting space (the item will likely stack if it
+is *not* a quest item).
+
+Entering Passwords
+==================
+Another useful method for quests is the *text_input* action. It allows the
+NPC to ask for a passwort or the answer to a question the NPC just asked.
+The player's answer is checked against the *expected answer* that you give
+when you set up this action.