It is located East of the Imperial camp, between Dawnstar and Winterhold. When you enter the Lighthouse, the doors to your right and left have Expert-level locks, but the keys can be found nearby. As you enter, the door on the left leads to the lighthouse exterior and fire, while the door on the right leads to the basement.
Continuing through the basement leads to Frostflow Abyss, an underground labyrinth guarded by Falmer and several Chaurus. This dungeon is especially notable for the number of Chaurus eggs you can harvest (approximately 450, or almost 100 pounds).
The player will eventually encounter a Chaurus Reaper at the end of the dungeon, which holds Habd’s Remains. Bring his remains up to the fire at the top of the lighthouse to gain the “Sailor’s Repose” active effect, which gives +10% to healing spells indefinitely.
Three journals can be found within the first floor of the lighthouse. The first, Habd’s Journal, can be found on the corpse of his wife, Ramati. The second journal, Sudi’s journal, can be found in the left bedroom on a table. Sudi mentions in her journal that she hid a spare key to the basement in her mother’s favorite keepsake. The final journal, Ramati’s journal, can be found in the right-hand bedroom. Ramati mentions in her journal that she unpacked her favorite urn and placed it on the mantle. The urn contains the key to the cellar door.
Beside the body of Sudi in Frostflow Abyss are a Bloodstained note and a Scrawled page. They tell of how Habd was bitten by a Chaurus, developing a fever and mumbling about Daedra; when eventually taken, he left his daughter with an Iron Dagger. It is implied she used this dagger to kill herself rather than, presumably, being eaten.
Mani’s Letter can be found in the knapsack in the left bedroom, mentioning his intention to leave.
There is a coin purse on the stair that leads up to the lighthouse.
The chest at the top of the lighthouse requires a key found on the Chaurus Reaper.