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Background
After completing the quest
Proving Honor plus a random Companions quest, when you talk to any of the main Companions, they'll tell you that Skjor is looking for you.
Walkthrough
Skjor will tell you that he has "something a little different" for you this time, and he'll ask you to meet with him at the entrance to the Underforge during the evening. The Underforge is located under the Skyforge. If you walk along the rocks at the Skyforge's base, it's pretty easy to spot the outline of the door to the Underforge.
When you meet with Skjor, he'll open the way into the Underforge, where you'll find Aela in werewolf form waiting for you. Skjor will cut Aela's arm and spill some of her blood into a fountain, and you'll need to drink the blood in order to complete the rite. When you do, you'll immediately turn into a werewolf, and you'll be forced to try out your new form in Whiterun. However, it isn't necessary to kill anybody (although Heimskr might be tempting); the sequence will end if you take too much damage or if you feed on one of your victims.
Note: You'll eventually learn away to remove the werewolf curse, just in case you don't like it.
When you wake up in the morning, you'll find yourself far to the east of Whiterun, near the ruined fortress at Gallows Rock. Aela (back in human form) will be with you, and she'll tell you that she's planned a "celebration" for you -- some agents of the Silver Hand are camping out at the fortress, and she'll allow you to kill them. Aela will then start following you. Before charging off into the fortress, be sure to equip your weapons and armor.
Note: From this point on, you'll be able to call upon your "beast form" once per day. You'll find it under Powers in the Magic menu.
Inside and outside the fortress, you'll encounter agents of the Silver Hand, plus some imprisoned or dead werewolves. Then in the throne room (#5), you'll encounter a Silver Hand boss named Krev the Skinner plus a few regular agents. Krev hits hard, so you might want to avoid him as much as possible while dealing with the other agents, and then concentrate on him at the end. If you get into trouble, then feel free to run around in circles. Aela can't be killed, so even if she gets clobbered by Krev, she'll eventually get back up and fight again.
After the battle, Aela will walk up onto the dais in the throne room, where she'll find Skjor's body. When you talk to her there, you'll complete the quest. Aela won't give you any sort of reward, but you'll find
Wolf Armor and
Wolf Boots on Skjor's corpse, and you'll find a full set of steel armor (and probably more) on Krev's corpse.
1 - Barred Door
You'll only be able to unbar this door from the western side.
2 - Prison
Inside the cells of the prison, you'll find some dead werewolves and also a live one. Sadly, if you free the live werewolf, it will just attack you.
3 - Book
On the table here you'll find the book
The Importance of Where, which will increase your One-Handed skill by 1.
4 - Book
On the table here you'll find the book
Last Scabbard of Akrash, which will increase your Smithing skill by 1.
5 - Throne Room
Exits:
- World exit.
