Dagger Delivery

You'll find this quest by speaking with Jarred, who stands just outside the door to the Inn. He'll instruct you to go to Owl's Nest and talk to Blackpond.

You'll find Owl's Nest tucked against the mountain side and at the river. You'll find it not far north of Kingsport. Just as you cross the bridge following the east coast, it's directly west between the river and mountain.

Once you get into the zone, you'll see a hill. You have to climb that hill to zone into a cave where you'll find Blackpond. There are a lot of spiders on the hill, so if you're not ready to fight them you might have to run by them to the zone line on the top of the hill and to the right.

Once inside you have to walk past the vendor you'll see at first into the first main room. Blackpond will be in that first room to the right when you first walk in. You will then tell him that "I have a dagger for you", and he will open up a trade box. You will then drag that dagger you were given to the right side and click give.

He will reward you with 500 gold and 3000 exp.

PS You should talk to Abela and Boden Koren while in this city (Kelly is Missing quest), since the Kelly you need to talk to is standing right beside Blackpond in Owl's Nest.