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well ... the name Ylving have no basis in the Danish tradition, but only for some reason in the swedish, so ... more correct would be "Of Eskildsen", although as a martonym thats somewhat bland, or make Svend II's parents marriage Martilinial (reasonable) and make it a simple continuation of "knytling", or renaming the whole dynasty to "Of Gorm" (although then we land in patronym again) or "of Jelling" which was the original capital of Gorm the Old which is the oldest king that there is literature about from the same time (well ... his son writing about him on the Jelling stones)

Personally i'd prefer using "Knytling" or if need be "Of Jelling"

...

That said, theres amble reason for the swedish historicans (at least the medivals) to use 'Ulfinger' (later corrupted to 'Ylfings') since Ulf Jarl (Thorgilsson) is said to be son of Thorgil Styrbjörnson, son of Styrbjörn Starke, son of the Swedish Mythical King Olof (II) Björnsson hence that the kings of their traditional rivals (Denmark) is in 'truth' Swedes, stealing a lot of the national honor, from the regions strongest kingdom
 
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The name comes from his father Ulf. In other words it's not a "mistake", it's because Paradox are Swedish.

Makes sense, that explains where the oddity comes from. Though you should never use medievel Swedish historical accounts or names as a historical description of anything danish (or vice-versa for that matter). There is more than a 1000 years of history of calling eachother bad things that are not strictly true. I guess this is why in English they are using the danish names for danish royal houses, and swedish names for swedish royal houses.

I think Jelling makes most sense to use here. It would fit with the use 'Yngling' for the Swedish royal house, since they too were actually a different house, Stenkilska, derived from house of Münso derived from house of Yngling, and that is according to swedish wikipedia no less ;)