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A small town in Dry Dry Desert in the game Paper Mario. Make sure you go here when you need to rest. Moustafa lives here, who gives Mario an item that lets him find Dry Dry Ruins.
In Paper Mario: The Thousand-Year Door, Lumpy mentioned that he visited Dry Dry Outpost during his quest to strike oil. Mario can learn about Lumpy's visit by listening to "Part 3: A Helping Hand", the third tale in his adventure.