The Icelandic children's hospital where Katia's adoption was denied and baby Annie lived and died.
The setting of Katia's Worst Memory is a children's hospital in Iceland, entered through glass front doors guarded by a large statue of a chipmunk wearing a bucket hat, a generic please-don't-sue-us interpretation of one of the Chip and Dale duo. Every sign inside is in Icelandic; in the dream Carl cannot read the writing, though spoken words still translate themselves in his mind.
Inside are the adoption caseworker's office where Katia's application is refused, the bathroom stall where her memory ghost silently screams into her own fist, a nurse station where a nurse reads an English-language romance novel without looking up, and at the end of the hall a long ward of six or seven cribs, all empty but the one holding baby Annie. Shi Maria bursts screaming into that ward at the end of the chapter, collapsing the dream.
Glass entry doors beneath a large chipmunk-in-a-bucket-hat statue, Icelandic signage throughout, sterile corridors leading to a bright ward decorated with colorful paper cutouts and dotted with monitoring machines.
The stage on which Katia's second worst and worst moments both played out.