On July 27, 1894, forest fires racing through dry timber slashings descended on Phillips from three directions, and within hours the city of 2500 persons lay in smoldering ruins. More than 400 homes, the business district, a new tannery, and the large sawmill were totally destroyed. Thirteen lives were lost, all during attempts to escape the flames by crossing the lake. Many families, abandoning their possessions, crossed the Elk River at the north end of the city to spend a frightening fire-reddened night at the water's edge, protecting themselves from the heat and flying embers. Undaunted, these same valiant people built a new Phillips on the ashes of the ruins. Squaw Island across Lake Duroy is also historically important, having served as an Indian burial ground for many years before Phillips was settled and for some years afterward.