You can then make your way to the shrine when you are ready. This will make Barbas travel to Haemar's Shame alone. Note that traveling with Barbas can be avoided by postponing his request during the second set of dialogue responses select "You were looking for me?" followed by "I've got things to do". Barbas will then be on his way towards this cavern, and you will have to follow him on a long journey. You agree to arbitrate this disagreement and Barbas tells you that Vile is probably close to a cult of worshippers living near Haemar's Shame. Taunting Barbas will make him reveal his master to be Daedric Prince Clavicus Vile.
Barbas will describe a falling-out that he had with his master, and says that he needs someone who can settle the disagreement. Choose the second dialogue option for a bit of background explanation. He will introduce himself as Barbas and will ask for your help. A dog will approach and enthusiastically address you, saying "You are exactly what I was looking for". Travel along the road a short distance southwest of town. In either case, Lod will give you some fresh meat for bait. You can either accept his request to chase down the dog or pass a very easy Speech check to persuade him to pay you part of the gold up-front for your efforts. When approached Lod will only show interest in one specific dog, a 'fine, strong creature that's been wandering near town', that he would like for you to catch for him. Regardless of your answer, he will then point you to the local blacksmith, Lod, who can be found working his smithy during the day. Once you reach the required level, a trip to Falkreath will net you an encounter with a guard asking a rather unusual question, namely if you have seen a stray dog running around outside town.