The Formation of the Fear Lords
Beginning in Doctor Strange, Sorcerer Supreme issue 31, the Dweller In Darkness is seen sitting at a table in his Halls of Fear with what is soon recognized as the Fear Lords. He explains to them that he has summoned them, Kkallakku, Nox, Nightmare, D'Spayre, the Lurking Unknown, and Straw Man, because they are the greatest inducers of fear the universe has known. He then explains his plan to them, that they are to take over the planet earth! The members, save for the Lurking Unknown, then passed around their backgrounds, and told of their defeats at the hands of various earth heroes, such as Thor and Doctor Strange. When all was said and done, Straw Man warned the others against going after earth, claiming that he saw it as a home, when he in fact was a guardian of earth mortals. After making his warning, Straw Man exited the Halls of Fear.
Straw Man's Betrayal
After leaving the Halls of Fear, Straw Man proceede to inform Dr. Strange of the Fear Lords' imminant strike. When Straw Man finished telling Dr. Strange and Clea of the plot, the Lurking Unknown set fire to Straw Man, incinerating his physical body near instantly. Although it seemed Straw Man was dead, his spiritual essence had in fact been transported back into his painted dimension. Although the Lurking Fear was truly in his element of fear, Dr. Strange and Clea still proved to be too much for him, and defeated him quickly.
After the Lurking Unknown's defeat, we see the Dweller In Darkness thinking to himself, pondering over his next movement of action, now that his plan was underway and, as he stated, "One down." Nox then attacked the city near Dr. Strange's Sanctum Sanctorum. Using the citizens' fear, she resurrected her two god-sons, Deimos and Phobos. Kkallakku then took advantage of the fear that Nox was causing and attacked with his Fear Eaters. Dr. Strange had encountered the Kkallakki before, and knew their strengths and weaknesses. Using his knowledge of the alien race, he cast a spell to draw the fear of all the people into himself, and lured the Fear Eaters, along with Kkallakku, into a portal to another dimension. After they were through, he utilized his dimension-distorted minimal size to sneak past the Fear Eaters and back through the portal, where, on the other side, he sealed it shut, trapping the Fear Eaters on the other side. In the meantime, Clea and Rintrah broke free from the clutches of Deimos and Phobos, and dispatched of them. Nox, again distressed by the deaths of her sons, escaped through a dimensional portal. Afterwards, we again see the Dweller In Darkness speaking to himself, saying "That's another two down, now to get rid of Nightmare and D'Spayre...", but this time, Nightmare was listening to the Dweller. Dr. Strange was also listening, thus the Dweller's plans of secrecy were destroyed.
D'Spayre went to Nightmare, believing his power was greater than that of the Dweller, and offered his assistance to him. The two the began their reign of terror over the citizens of earth. The Dweller In Darkness saw this as a challenge to prove who was more powerful, and began instilling his own fear into the mortals. But when the three Fear Lords put all of their efoort into the Fear, the humans began to forget their fear and know only despair. When this happened, Nightmare and the Dweller began to lose their power, and D'Spayre grew in power to a near omnipotent state. Realizing what had happened, the Dweller and Nightmare escaped. Gathering their strength, Dr. Strange, Rintrah, Clea, Daredevil, and the reincarnated Straw Man attacked D'Spayre. Their courage proved to be too much for D'Spayre, and the last Fear Lord faded into nothingness, thus ending the reign of the Great Fear.