Lord Windgrace; Resolving the First Loyalty Ability
Neither of your interpretations are correct. The order of events is discard, draw, [draw]. Look at the way the ability is ordered &quot;+2: Discard a card, then [...]&quot; The very first thing you do while resolving this ability is discard a card, then you draw either one or two cards. There is no replacement effect involved, and the first draw is unconditional. This means that even if you fail to discard a card (no cards in hand) you will draw that first card, but the discard definitely happens first if possible.