The gnolls of the Alik'r Desert in Hammerfell are a long forgotten race. They exist in the bedtime stories of Redguard children. And, to tell the truth, it is probably better that way. Reguard elders still occasionally recount stories of the brutish savages and how they terrorized desert caravans. But being a largely nocturnal, cave dwelling beast, many did not notice when they migrated away from Tamriel.
It was only when a strange character showed up in a Redguard village that any news of the Gnolls' disappearance come to light. He explained that he was of a race long descended from the gnolls. As the gnolls came to the continent Khloref, and established, and went farther into their cave homes, they found that they could thrive on certain funguses, certain plants, and species of cave dwelling fish and rats.
Overtime, they became more and more civilized, and began cultivating and farming their food. To distinguish themselves from their savage ancestors, this new race referred to themselves as Hyaenins. No longer having to hide in caves, the Hyaenins have established many above ground settlements within the borders of their desert homeland, Volenfell.