The heroes were in Dagger Falls. The economy here was such that there is little surplus for sale/trade to travelers. Townsfolk barter for goods moreso than actually purchase items. Coinage is less important here than in most places the heroes have been. Within this backdrop operated the `Dalesmen' who strive to drive Constable Tren and his supporters out of Dagger Falls.
In exchange for his title over the town, Tren allowed Duke Kalinstren's minions to loot the area and town of livestock and other things that they deemed worth stealing. While it would seem like a good idea to get rid of Tren, not all of the people in town supported this action. Many depended on the supply caravans and troops from Kalinstren that stop and spend coins.
The heroes encountered one Randall Morn and his Dalesmen while traveling towards Daggerdale. Morn warned of a `Dream Fever' which affects the town. The heroes are persuaded to assist in the investigations. Upon arriving in the town, the heroes were immediately summoned to the constable's citadeland given orders to rid the town of the night creatures that dwell in the old temple of Lathandar, for the constable deduced that the Dream Fever emanates from there. The options were to help or spend some time in the stocks.
The heroes' investigation revealed information about a sword forged many years ago by dwarves. All that remained of the dwarves was their old outpost, `Eagle's Eyer. The heroes travelled to that place and recovered the fabled sword. Traveling back to Dagger Falls, the heroes were beset by armed men. Fighting by moonlight, the heroes prevailed. However the leader of ``Tren's'' troupe, who was felled by an arrow at a distance was actually Randall Morn. Since the dimwits knew only Morn and recognized naught of his men, melee resulted and the remaining Dalesmen became dead. After the battle, the heroes deduced that the bandits first did away with Morn, then attacked them. But after intense discussion of the obvious, they realized their error. No longer needing to worry about blowing Morn's cover, the heroes set back to town with blood on their hands and not a brain among them.
Soon Tren realized what happened and decided that it would be best to order the heroes arrested in order to improve relations with the village populace. Avoiding the constable's men, the heroes sought out Kessla at the Red Rock and informed her of the case of mistaken identity. It was agreed that the heroes had done enough damage. The heroes, in a effort to remedy the situation wanted to assist in some way. They decided to continue their investigation of the Dream Fever.
The investigation led the heroes to the burnt temple of Lathandar. Upon entering the temple, they found a lab beneath the ruins with evil doin's a transpirin'. Recognizing the situation for what it was (for a change) the heroes dispatched Eragyn the Evil Priestess but could not finish off Colderan the Mage Lord. So Colderan escaped, vowing revenge. The heroes deduced that Eragyn had brought back Colderan the evil mage lord as part of scheme to conquer the town and surrounding areas-probably the world too.
After their success (killing of the head of the resistance movement and letting the bad guy escape) the heroes bade farewell to Kessla with Tren's men hot on their heals.