The legend associated with Shiv Khori is very fascinating. It goes that thousands of years ago, a demon called Bhashmasur spent a lot of time meditating deeply on Lord Shiv. In time Bhashmasur is believed to have extracted a blessing from Lord Shiva that he be given the power to end the life of any one by keeping his had on his head.
And after obtaining such blessing, the demon Bhashmasur intended to end Lord Shiva. Realizing the evil design of the demon, the Lord Shiva decided to escape alongwith Mata Parwati and Nandi cow to safety.
In the process Lord Shiva stopped at a place near Shivkhori for rest. But the demon that was following closely reached there as well; and started fighting with Lord Shiva. Even after a dreadful battle the Lord Shiva decided not to kill Bhashmasur so as to keep dignity of his own blessings.
While leaving the battle Lord Shiva threw his trident (Trishul) to create the famous Cave of Shiv Khori. The design of the entrance allowed only Lord Shiva alongwith Mata Parwati and Nandi cow to enter this cave leaving the demon out side.
Realizing this, Lord Vishnu in the guise of a lady, came and lured the demon to dance to her steps. Bhashmasur was so intoxicated with the dance that the demon started following each move of the dance as dictated by Lord Vishnu in the disguise of a lady. Lord Vishnu then made an ultimate move by keeping one hand on the head and as the demon followed the step by keeping his hand on his own head, Bhashmasur was killed by his own power. Lord Vishnu alongwith other deities then entered the Holy cave.
As per the legend 33 crores deities have manifested in this Holy cave in shape of pindies. The views of natural impression & images of Hindu Deities is a fascinating sight inside the cave.