The player discovers various lore about his past and finds an Iron Acorn. The next area has a battle against a group of caravan guards. After killing all of them, you open Kyless' cave into an underground cavern of several levels, filled with shadows, stalkers and war dogs along with random tier 1-3 loot. There are a lot of Creeping Darkness traps around.
The final boss is Kyless, a Cursed with a number of nasty abilities, including draining hate from you. Give it everything you have!
After the fight you can either keep his book or destroy it. When you exit the cave, you will encounter Berethh. Your options are to attack him, ask to overcome your curse, or state you don't wish to kill Berethh. Saying you want to overcome your curse will only lead to him attacking you.
Beretth is a Thalore archer with over 1200 HP, a range 8 attack of 54 accuracy and 103 damage. He will use Disengage to keep his distance and Crippling Shot to slow you. Speed and effect prevention are helpful here. After killing him, you will get a bunch of tier 3 loot, and the Acorn you found earlier will transform to either the "good" or "evil" version.
Finally head back to the starting meadow and clear out the archers, guards and war dogs; you're done.
For both, the item is of type misc / trinket (does not need a slot, simply keep in inventory)
Iron Acorn (good version)
- +30% mind resistance / +8% physical resistance
- +40 Maximum Life
- +15 Mindpower
Cold Iron Acorn (evil version)
- +30% mind resistance
- +12% physical damage
- +20% movement speed