The spirit of a dragon has been enslaved by an evil necromancer. Do you go through the trouble of freeing it or do you cut it down along with anyone else who stands in your way?
The entrance to Kanaglym is at 27 in the Underground River. It is guarded by the undead spirit of a dragon named Halatathlaer. Getting past her is the start of the Quest.
She'll warn you away. You can fight her. She amounts to a less powerful version of the Shadow Dragon in Baldur's Gate 2, as her breath-weapon is single-target and drains levels. But she's still plenty of challenge for a Siege of Dragonspear-level party.
You can avoid combat with dialogue options that do not outright antagonize her. Note that additional dialogue options become available if you previously encountered her offspring, the Blind Albino Wyrmlings and have the Journal of Ithtaerus in your possession. You can express regret and sympathy for having to put them down as an act of mercy, or mock her over their fate. A loophole in the geas placed on her is that she's compelled to threaten anyone who approaches the entrance, but not compelled to attack anyone who approaches the gate. So you can simply walk past her, and she's more than happy to let you through. There will be another dialogue, during which you can promise to find a way to free her if you wish.
You'll start off at 1 in Kanaglym. Kherriun will be at 6 as the leader of several close-by Dark Magicians. The Dark Magicians at 5 will join in as well. There is overlap in that defeating Kherriun and all of her Dark Magicians is the objective of The Cabal Quest.
Halatathlaer will initially join the fight against you, under Kherriun's control. But if you inflict enough damage on Kherriun then her soul jar, the means by which she controls Halatathlaer, will shatter. Halatathlaer's spirit will be freed and she'll instead start attacking the Dark Magicians. You can if you wish let Halatathlaer slaughter them by herself. Or you can stay and try and rack up as much xp as you can. Keep in mind that you only get xp for a given enemy if you land the killing blow instead of Halatathlaer.
She'll speak to you once the battle ends. It's also another opportunity to bring up the fate of her children as described in the Journal of Ithtaerus. She'll warn you to beware 'the exile' if you've been friendly enough with her. The party receives 32,000xp for freeing her.
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"I think we make a fine partnership! Like Drizzt and Wolfgar! Elminster and Volo! Hah! We should go into the mobile vegetable peddling business together!" -Jan Jansen, Baldur's Gate II
