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Quick Walkthrough

1. Speak with Fedris Hler in the Temple: Reception area and receive his orders to track down two Goblin Warchiefs and, optionally, two Altmer trainers.
2. Speak to anyone in town about the Goblins to learn that they have been seen in the Godsreach Sewers.
3. Explore the Sewers and connected Dungeons.
4. Find the two Warchiefs in the Tears of Amun-Shae section.
5. The two Altmer can be found in the bottom of Teran Hall, East Building.
6. Return to Hler for your reward.

Detailed Walkthrough

Fedris Hler

You meet with Fedris Hler in the Temple Reception after being directed to him by a guard after killing the leader of the Dark Brotherhood. Though you still don't know why you were targetted by the Brotherhood, Hler will ask you to help track down a Goblin army supposedly being prepared by Lord Helseth, the new King of Morrowind by a series of mysterious coincidences. You must kill the two Goblin Warchiefs, and two Altmer trainers if possible, and return to Hler.

Finding the Army

Hler suggested asking around town about the Goblins so do just that. It shouldn't take too long, or too many gold pieces, to learn of some rumours about some creatures in the sewers of Godsreach. The Godsreach area can be reached via the door in the SouthWest side of the Temple district. The Sewers can be found in the NorthWest corner in the Godsreach district (labelled as the Old Mournhold: Residential Sewers). The rough difficulty of Goblin varients in increasing order is:

1. Goblin
2. Footsoldier
3. Handler
4. Bruiser
5. Officer
6. Warchief

The Sewers and Dungeon

The area you have to explore in order to find the two Warchiefs and Altmer is all underground in an expansive labyrinth of sewers and caves. There are 9 sections involved:

1. Old Mournhold: Residential Sewers
2. Old Mournhold: West Sewers
3. Old Mournhold: Battlefield
4. Old Mournhold: Tears of Amun-Shae
5. Old Mournhold: Armory Ruins
6. Old Mournhold: Abandoned Passage
7. Old Mournhold: Residential Ruins
8. Old Mournhold: Teran Hall
9. Old Mournhold: Teran Hall, East Building

Several areas can be reached from multiple paths so you don't nessecarily need to explore all of the above, though there is no harm in doing so. The areas have a good number of various Goblins and those dog creatures which you must face. Many of the Goblins will use Restore Health magic which makes fights all the more interesting. Many of the creatures will reappear if you return to the area so the safest bet is to completely clear an area before continuing on. Also as a warning, watch out for the invisible pit trap in Teran Hall, an interesting addition even if it does kill you.

The Warchiefs

Warchief Durgoc can be found in the Southern portion of the Old Mournhold: Tears of Amun-Shae section of the expansive dungeon. The Tears can be reached via the Residential Ruins or the Armory Ruins. Warchief Kurog can be also be found in the Tears of Amun-Shae wandering the tunnels close to Warchief Durgoc. There is a good hoard of loot reached only by levitation in the waterfall area of the Tears section (including an Adamantium Axe).

The Altmer Trainers

The two High Elven trainers, Yarnar and Armion, you were asked to find can be found in the Bottom of Teran Hall, East Building in the Residential Ruins area (also can be accessed from the bottom of Teran Hall). They are close together but you might want to try some tactics in order to fight them one-on-one as they can be a handful if they attack you together. Paralyzing one or both or attacking one from a distance are worth a try or two.

Return to Fedris Hler

Report back to Hler in the Temple: Reception area. If you've killed both Warchiefs and both Altmer trainers you'll receive a whopping 15,000 gold as your reward. If you've only killed the Warchiefs I assume the reward will be less. Speak to Hler again and offer to be further service to our Lady and you'll be directed to Gavas Drin, the Lord Archcanon, in his office her at the Temple.