Bavelock City - You arrive in Bavelock and Caleb takes you to see Argas in his gym to practice some new combat moves. Argas teaches you to counter attacks from enemies. When the training is done, talk to Jaden who's in the gym.
You start the "Helping Jaden" sidequest. Jaden is irritated that Brock the blacksmith is always busy with one of his projects. Brock is working on a new sword and wants Argas' approval that it's good enough. He gives you the sword and you show Argas it. But he wants to see it in a real battle and Luvannon summons a Gornak for you to fight. Defeat the Gornak and Argas sais he is impressed. Return to Brock and he will take the sword back but will add a status effect on your old sword, as a reward for helping him. When that sidequest is done you have to finish another optional sidequest before you meet Caleb in the Golden Apple inn.
On the road again - Head south to Savina. One the way to Savina you pass Gwydion forest. While in there Caleb teaches you about magic, and you learn the spell Heal. Caleb can now cast Chaos and Dementia.
The marketplace - Next morning you have to complete a sidequest (if you haven't completed 3 sidequests already) before going to the marketplace. Caleb goes off on his own and you head to the second floor and meet Leon. Win 3 rounds of the shell game to get the crystal he has.
Go back to the first floor and show the crystal to Caleb. Meanwhile he shows you a map he bought, but as this happens a child runs and grabs the crystal and runs out of the building. This starts a chase scene where you chase him out of the city. The child runs to Dion who is standing outside the city walls, waiting for him. Fight Dion to Limit Break attack, from whatever power is inside the crystal. Win the fight and after Dion leaves, pick up the crystal.
Blackwhisper Cave - You and Caleb decide to continue to Blackwhisper Cave, where Leon said the crystal was found and where there might be more of them. You walk through the dark cave and in a big room at the very end of the cave, you find another crystal piece that infuses you with the same power the first crystal did. It causes a minor explosion that makes the instable cave shake and fall apart. You run out but meet the Phantom Stalker in a timed boss battle. You must defeat it in 2 minutes or you both die.
The Golden Demon - After running out of the cave, you head to Bavelock but on the way you meet the Golden Demon right outside the city walls. You fight him but only until he reaches 2100 hitpoints. He then steals the crystals and disappears and summons a Carrion Hound. You get poisoned and barely survive. You enter a short dream sequence, simply follow the golden road.
Bavelock in lockdown - You then wake up in a room in the Golden Apple inn. Meet Caleb downstairs, he stays in the inn while you go to the library and seek information about the Tear of Neriah. On the way to the library a guard will tell you the city is in lockdown because of the Demon who is still nearby.
Escaping the city - You can ask a library attendant about the Tear of Neriah and he will say it's on the second floor. Find the book and a short cutscene will unfold, telling the history of the Tear. Afterwards you sit in the Golden Apple inn, and Caleb will tell you that he will help you gain the crystals back if you find a way out of the city. Talk to the guard in the inn, who tells you the Demon might be in the Mogwai Mountains. Then talk to Farimir in the inn, he asks you to buy a drink for him. Buy him a drink and he will tell you about an underground passage that leads out of the city that someone named Darcon in the Bavelock prison might know about.
Prison break - Go to the prison, but there is a guard telling you cannot go in and talk to Darcon.
"Soundless it flies. It's faster than me. In darkness it dies. It's all we can see.
Thieves' Passage - Inside the Thieves' Passage there a lot of locked gates that need to be opened by corresponding levers. But the first obstacle you meet are two bandits who require you to say the "thieves' password" to pass, or they will fight you. There is a small bookshelf near the beds with a book that will tell you the "thieves' password". Read it and talk to the bandits again, or simply fight them. Walk through the passage, open all the gates and climb up the eastern ladder.
Mogwai Mountains - You now stand outside Bavelock, head east towards the Mogwai Mountains. When you arrive there you see a fat creature sleeping on the road. At this point Douglas Gavelin pops up, telling you that the game is unfinished and that it ends here.