In Tengpoche, cadet Aden Shadowheart investigates the warehouses and learns that the Tave Trading Company is implicated in demonic activities. He sends two parrots — one to Col. Tybeam at Fort Diamir, and one to the monastery where he was raised. His investigation leads him to a thug named Pimm, whom he arrests and hands over to Malinda Korburg, the captain of the Tengpoche guard.
After the rest of his party fails to meet him back at the inn, Aden returns to the Tave Warehouse and breaks in. Meanwhile, underneath the warehouse, the party recovers in the sewers from their fight with the basilisk. The cadets Draylene, Eddin, and Zayna, the mercenaries Fydak and Nails, and the urchin Mac sneak up into the warehouse, accidentally encountering Aden.
United, the party dons the sky-blue coats of the merchant company and infiltrates the Tave offices, killing an old clerk and some night-shifters. They learn that Beatrix’s sword is to be given as a gift to a demonic entity this very night. They also learn about something called “Project Minuet” a stronghold on the fringes of the known world.
Busting into a deep-cloistered hall of the warehouse, they see Tony, the leader of the company, delivering the sword to a cambion – a half-demon. The party fights through Taves and swarms of scarabs, felling Tony and the cambion.
After the battle, Fydak attempts to resuscitate the demonic creature to question it. Draylene prevents him from doing so by decapitating the cambion — Fydak responds by attacking her, leaving the party. Zayna pursues him, arranging a secret meeting.
The party returns to the Jade Turtle Inn and rests, protecting the sword. Zayna meets Fydak in his room and shows him the Demonomicon which Fydak does not recognize. He agrees to return to Fort Diamir with them.
Captain Parker visits the rest of the party in their room, telling Mac to go with them for his own protection, as he has drawn too much attention to himself in Tengpoche. The morning of December 17th comes, the heroes get provisions and plan to leave town.