Knakk and Kafli headed East when the dwarf-fellowship parted ways at the base of the stairs from Orc-watch. They deemed the Orcs only a bump in the road and that they could find a path through Orc-territory and make camp on the far side of the Redhorn Lodes.
'Our fellowship from Orc-watch didn't make it far before parting ways. We camped here for a night, then arguments broke out about what we should do next with ranks of Orcs in the way. The two dwarves who headed to the southern caverns were well-prepared, but the two who headed east -- straight into the Orcs' territory -- have me concerned. Please, ${PLAYER}, can you look for them and make sure that they made it where they were going?
'They went straight into the middle of the Orcs' territory, believing there was a safe road between those Orc-tribes' encampments.'
The two dwarves, Knakk and Kafli, should be found somewhere to the east, around or beyond the Orcs' territory.
You have been asked to find the dwarves Knakk and Kafli.
Knakk must have kept going after Kafli fell to the Orcs, but probably is not far away. He surely would not have wanted to leave his friend behind....