- Wait. Within a few in-game days you should receive “Mysterious Letter” from a courier.
- Sleep in any bed. You will awaken in Abandoned Shack.
- Kill any of the three hostages.
- Travel to the Dark Brotherhood hideout and join the Brotherhood.
After you’ve finished the prerequisite quest and waited a bit (or fast-traveled to a different hold), a courier will appear and give you an ominous note bearing the words “We Know.” After you have received this note, the next time you sleep — no matter how long for — you will “…awake after a full sleep”, but your surroundings are unfamiliar.
You will have awoken in an unknown location, and will be greeted by masked and hooded woman named Astrid. She will tell you that killing Grelod the Kind has pleased the Brotherhood but that, in doing so, you stole a contract rightly-belonging to the Night Mother. Thus, you have to repay your debt to the Brotherhood; A life for a life, as she explains. If you refuse, you will be told that you cannot leave the room until someone dies. When you get out of bed, you will see 3 people tied up. There is a contract in one of them, and you have to figure out who by talking to them.
The first of the three is Fultheim the Fearless, a Nord mercenary who works out of Skyrim. He bears no particular ills against any person, but when asked about his potential assassination, reasons that as a sell-sword, any number of people could have put a contract out on him. When intimidated he admits to sometimes getting carried away during battle.
The second is Alea Quintus, a crass and abrasive noblewoman with a couple of children who will constantly demand to be released. She has made many enemies through her style.
The third is a Khajiit by the name of Vasha; a self-professed thief, murderer, and rapist. Of the three, he is the only one who manages to remain calm in the face of impending death; in fact, he mentions that it isn’t the first time he’s been “bagged and dragged” before. If you choose to slay Vasha, Astrid will remark that, having as many enemies as he did, the Khajiit was an obvious choice.
In truth, it doesn’t matter which person you choose here, you’ll be rewarded with an initiation to the Brotherhood. You can, if you choose, kill all 3 hostages, to which Astrid will remark “Well, well, aren’t we the over-achiever? Had to be one of them right? So why take chances…”
After at least one hostage is dead, you are given the password to the Sanctuary’s Black Door: Silence, My Brother. You are then free to go; you will be given a Key to let yourself out.
Alternatively, you can fulfill Astrid’s condition (that you cannot leave the room until someone dies) by killing her instead. The fight can be difficult, but if you succeed you may then take her Dark Brotherhood armor, her unique dagger, Blade of Woe, and the key to the shack. Upon her death, Astrid will say “Well done” and you will be notified that you have failed the quest. A new quest “Destroy the Dark Brotherhood!” is added to your journal, and you may then free the captives.
To defeat Astrid, it is best to take advantage of her slow descent from her “relaxed” state. Being heavily armored will also help as the cabin is fairly cramped. Alternatively, laying down large amounts of magic while backpedaling and maneuvering will defeat her quickly, though if area spells are used, you’re likely to kill the captives (if it makes a difference)
Keep in mind that completing the quest in this way eliminates your chance to join the Brotherhood forever.
It is possible, although cheap, to jump to one of the top of the cages and attack Astrid from there. She will retreat to behind the captives if you are standing on the cage next to the bookcase she was lounging on and she will stay there, allowing you to take her out with arrows.
You can pickpocket her Blade of Woe and armor, then kill one, two or all of the people behind you. After you go to the Sanctuary the armor and blade respawn in her inventory, and the ones you took no longer count as stolen.