I like how you start at the end of the game, rather than the beginning. A very good touch, and I was literally filled with joy by it. I'm not sure why, but I was. *shrug*
The one thing I didn't like was the dialogue at the beginning. Rather than cope what had been said straight from the game, I would have liked to see your own creations. You could have said the same things, but it wouldn't have had to sound so...boring and robotic. I didn't like the game dialogue because I was looking for more of a panicked and fast-paced speech. Mehruhnes Dagon, a Daedric god, had just entered Tamriel with a full army of monsters at his side. I high doubt anyone would have been able to stay as calm as Ocato.
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The situation must be terrible, Varvur found himself thinking
Meh, I rather like it when thoughts are italicized, but that's just a personal preference of mine. I thought I'd tell you anyway just to give you another perspective.
QUOTE
and all was quiet again, for now anyway.
This seems a bit odd to me. Since it's an all-out invasion, even if they had cleared their section of the city, wouldn't they have heard the screams and roars coming from the other districts, or at least the ones beside them?
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“Thank you Varvur..."
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“Don’t mention it Baurus..."
This is something I see from writers a lot, and I always find it very important. When in speech, when we are addressing someone by name there is usually a slight pause before that person's name. So, in the above sentences there should be commas; a comma before "Varvur" in the first, and and a comma before "Baurus" in the second. And that takes care of the slight pause. Do you know what I mean?
I personally thought your battlescenes were fairly weak. You didn't do a whole lot of detail in the scenes, and mostly you said stuff like "They defeated the "etc, etc" and moved on." I don't like that, because I can't picture in my head what's going on. I can't picture the spilled blood, the torn limbs, the screams of agony, etc. You know? And you didn't describe the Xivilai at all, other than saying that they were blue. The Xivilai are indeed much different than the normal Dremoras, so it would have been better if you had explained
why.
All of that said, it was a wonderful first chapter. I love the twist at the end, and I simply can't wait for the next installment.
I'm sorry if you find my critique harsh or nitpicky, I apologize.

It's just that while I enjoy a good read, I'll always do my best to try and help the author get even better as well.