Cool game
very good for a first flash game. Nice pixel graphics. I can use some improvements, mainly the silence :p, just rip some random music track in the background and some clang noises for combat.
In the next chapter it would be cool to see a level up system and maybe some other skills like fury (damage vs hp trade off seems unbalanced towards losing hp) the +max hp potion should give you the 10hp for free as with only one recovery point and limited potions it seems quite useless. Money and a shop for potions could be cool, along with any other suitable things, maybe let us buy skills or extra atk/def points. DIAGONAL movement should be put in as it makes walking more smooth.
(*spoiler*) Oh and did the game end abruptly with him and lina walking to town. there wasn't any "end of chapter 1" thingy so im not sure. Add that in if it does end there, and if it didnt i did something wrong :p
Ray