Yes, they just used a few of the elves (same as the first dragon knights were also elves, IIRC).
If you load any save in the Developer Mode version of D2:DC, a little way down the 'goto Region' dropdown list is a section of entries starting with 001_BattleTower_Beach; the second has DragonElf in the name (enable god mode first, and any save before that point will let you go through the conversation after teleporting and using the ladder you end up close to).
