Mírdiniel, unconvinced by the absence of Elf-relics among the refuse in Dannenglor, desires to wrest the stolen plunder from the vile grasp of the merrevail.
'This will not do. I believe that the most important treasures left behind by our brethren will be found on the merrevail themselves. You should return at once to Dannenglor and wrest what you can from the hideous beasts!
'Be very careful, for the mervyl and merrevail are deadly foes. The ruins, as you know, are fraught with peril. You should defeat enough merrevail to get a sense of what sort of treasures they bear.
'When you have collected a fair number of relics, you should bring them to me. I will be able to tell more about the Elves who were here before and perhaps discern some of the history of this place.'
Merrevail can be found in large numbers at Dannenglor, the ruins north of the Haunted Inn in the Dourstocks.
You should collect treasure from the greedy morroval beasts that hoard it.
Mírdiniel waits in the Haunted Inn, in the Dourstocks of Mirkwood, south of Dannenglor.
You should bring Mírdiniel the plunder you wrested from the merrevail of Dannenglor so that she can examine it.