Kano - Boko Haram militants suffered heavy casualties when Chadian troops pushed into the country this week, residents who fled the fighting told AFP on Thursday.
Chad's army said on Tuesday evening that they had seized control of Dikwa, 50 kilometres southwest of Gamboru.
The offensive deep inside Nigerian territory was a first and suggested a strategy to tackle other rebel-controlled areas in Borno state, which is the group's stronghold.
The Chadians are part of a four-country coalition mounting a regional fight-back against the Islamists.
"Chadian soldiers took over Dikwa from Boko Haram after heavy fighting on Tuesday," Bababura Diwa, who lives in the town, said by telephone from Fotokol, across the border in northern Cameroon.
Diwa said the Chadians came from Gamboru with heavy artillery power and overpowered a group of militants at Lomani village.
"When they came into Dikwa there was intense fighting but at last they subdued the Boko Haram fighters," he added.
"They killed many of them, including Abu Ashshe, their commander who was notorious for seizing cattle in the area.
"I used the opportunity provided by the presence of the Chadian troops to leave the town. I was afraid to leave when Boko Haram took over the town for fear of being branded a traitor and killed."
Diwa's account was backed up by several other residents, who took advantage of the Chadian advance to flee the ancient town.
Jidda Saleh, another resident, said Chadian troops launched heavy aerial and ground attacks on the Kala-Balge area, particularly on Nduwu village.
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"The whole village was bombarded and it is obvious Boko Haram suffered heavy casualties from the aerial attack. Ground troops moved in later," he added.
"Meleri, which has a huge Boko Haram concentration, was also bombed by Chadian military jets and then taken over by ground troops.
"By the time we left we learnt the Chadian soldiers were on their way to Kushimori village where Boko Haram keep the livestock they seize from people.
"They have kept thousands of livestock there. They sunk boreholes and recruited people to rear the animals for them".
Algoni Wal-Amire, another Kala-Balge resident, welcomed the offensive.
"Living under Boko Haram was like living in a minefield. You are always afraid your next step could be your last. I thank God I'm now safe from them," he said.