Kill 12 Starving Dire Wolves and 8 Rabid Dire Wolves, then return to Lars at Sven's Camp on the western border of Duskwood.
Sven and I have dangerous days ahead of us, what with the Necromancer to the east and all. And out here alone as we are, we have to hunt for our own food. It seems every time I'm heading back to camp with some meat on me, starving or rabid dire wolves come out of the forest wanting a bite. It goes without saying, living out here is dangerous work!
But if you can rid us of some of those wolves, we'd have an easier time of it. They mostly prowl north and east of here, near the river.