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Dragon Age 2 Walkthrough Act 1: Act of Mercy

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Return home and look for a letter at the writing desk. Accept it and go to the Wounded Coast Approach on the map.

A new type of enemy will be waiting on the Wounded Coast Approach -- Dragonlings. They are not heavily armored, but they are fast and they will quickly swarm your party. Try and get them as they rush forward. Thrask is waiting at the entrance to the Runaw

You will be attacked by an Apostate Mage and a handful of corpses as soon as you enter the cave.

The mage, Decimus, waits at the end of the cave. He attacks with a handful of Apostate Mages and corpses, but he is by far the most dangerous of the lot.

When the bloodshed is finished, a mage will approach asking for help. You can either help her escape in exchange for a solid magical item or turn her in. If you want to help her escape and Varric is in your party, choose the "Convince them you are dead" option.

The Templars are waiting outside when you exit the cave. If Varric is in your party, he will convince them that the Mages have escaped. Kill the Hunter as quickly as possible to avoid being stabbed in the back, then finish off the rest with whatever magical attacks you can muster. Your reward will be a powerful Chantry Staff. Give it to either Merrill or Anders.