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The first major hip hop crew from Iceland was Quarashi, who were inspired by the rock hybrid music of The Beastie Boys and Rage Against the Machine. They rapped in English, but were followed by performers like XXX Rottweiler (formerly known as 110 Rottweilerhundar) who along with Sesar A had the first all Icelandic hip hop albums published in Iceland (2001). Later (2002) they were followed by a decent amount of rappers following their lead and rapping exclusively in Icelandic. Bæjarins bestu, the freestyle battle champs of Iceland in one unit, Móri, a gangsta rapper who uses Icelandic, Afkvæmi Guðanna (The Offspring of the Gods), Bent og 7Berg (Bent and 7Berg), Skytturnar, Hæsta Hendin (The Highest Hand) and Forgotten Lores. Icelandic lyrics are usually very direct and aggressive, with battle raps forming a sizeable portion of Icelandic hip hop.

XXX Rottweiler hundar released their debut album in 2001. With their aggressive lyrics about having sex with mothers of others, killing people or "wack MCs," hard politics, as well as their anti-God song "Blaz Roca Achbar," they created massive discussions all over Iceland along with turning many youngsters on to rap music.

Forgotten Lores released their debut album "Týndi Hlekkurinn" in 2003 and their second album "Frá Heimsenda" in 2006. The albums are two of the most critically acclaimed Icelandic rap albums and "Frá Heimsenda" received a 5 star rating in the national newspaper Morgunblaðið.

One of the largest hip hop events is Rímnaflæði in Miðberg, a freestyle competition where young MCs and rap bands (usually sixteen and younger) compete by rapping a single song on stage. The first jury was made up of Sesar A, BlazRoca (XXX Rottweiler hundar) and Omar Swarez (Quarashi).