Through a Nightmare Darkly
The title is a reference to a verse in the New Testament, the essence of which is that our perceptions do not give us the whole picture or that our understanding of reality is flawed ("we see through a glass, darkly" or something to that effect). That's a can of worms that I don't feel like dealing with in a game walkthrough. Perhaps when I get around to writing my philosophical magnum opus... Anyway...
Various NPCs in Bravil will point you to Kud-Ei, the steward of the local Mages Guildhall. A friend of hers has gone missing and she's trying to find someone who is willing to find her friend. If you are in the Mages Guild, you'll have to get a recommendation from Kud-Ei and you'll see the "Kud-Ei" topic in her dialog options. While you may start both quests, I've never had the testicular fortitude to run simultaneous quests from the same quest-giver when I could avoid it. But, considering that it's only 1s and 0s and that a timely saved game can cure almost any problem you might create, go for it if you're of a mind to.
Kud-Ei will tell you that her friend, Henantier, is missing and she needs someone to find him. With a little prodding, she'll eventually confess that she knows exactly where he is, but that he's trapped and she's not sure that she can free him. No matter how much you might feel for her predicament, the proper response is that you're only in it for the reward. So whenever you're ready, follow her to Henantier's house.
He's upstairs in one of the beds, apparently trapped in a dream of some sort. Kud-Ei tells you that he created a Dreamworld Amulet as a way of using his own dreams as a training ground and that he's been in there for three days now. She can't go herself because Henantier knows her and would probably ignore her as being a figment of his dream. But a total stranger showing up would be something else entirely. When you're ready, let her know and she'll give you the amulet. Equip the amulet and then activate the second bed to rest and enter the dream world.
You'll find yourself in a nightmare version of Henantier's house and, sure enough, there's Henantier. And there you are, too; silenced and naked. Your magic won't work and you don't have any of your equipment. So grab a set of clothes out of the dresser before you freeze your tushy off. You might also want to pick up "The Lunar Lorkhan" from behind a table. It's a skill-booster and this is the only place in the game where it can be found outside of random loot.
Henantier is not terribly helpful except to tell you that he's lost several things and that you need to find a way out. There are only four places you can go: the Test of Perception (upstairs), the Test of Patience (upstairs), the Test of Courage (downstairs) and the Test of Resolve (downstairs).
This can be the easiest or the hardest of the tests, depending. The first thing you'll probably notice is that it's awfully dark in here. There is a pedestal with an Ayleid Chest that has a Torch in it. Grab it and hotkey it. If you go too slowly down the path, your torch will burn out before you get where you need to go and you only have one torch. If you go too quickly, you'll die either from traps or falling off the path. So the secret to success here is to use the torch when you need it (to avoid traps) and to save your torch by dousing it in those areas that have enough light for you to see where you're going and what's in front of you. Just follow the path and watch out for traps. About the only one that you can't bypass is the falling rocks trap early on, but if you move slowly enough, the rocks will miss you and bounce off of the path before you get there.
For the rest, just don't step on any pressure plates, dodge the swinging blades and otherwise be careful. When you get to the end, grab the glowing sphere and you'll be transported back to Henantier's location.
I look at this and think it should be called "Fun With Pressure Plates". In front of you is another Ayleid Chest, this one called "Study". Open it and grab the document. It's going to look like some sort of weird code until you realise that it's a map of the three puzzles you have to traverse in order to get through. If your Acrobatics skill is good enough to let you jump over one or more rows of pressure plates, go ahead and do it. There is no penalty for not hitting all of the right plates in the path; only for stepping on the wrong ones. If you misstep, you'll get shot by those arrow traps that you find in the forts.
For the first puzzle (4x4), start on the second column from the left. Go forward two pressure plates, step left one pressure plate and then go straight forward.
For the second puzzle (6x6), your starting place is pretty obvious because the others are all blocked by pillars. Go forward two, left two more, forward two, right one, forward one, right two more, and then forward one to get out.
For the third puzzle (8x8), your starting place is obvious. Go forward three, right four, forward two, right one, forward two, left three, backward one, left four, and then forward to get out. Follow the path, grab the glowing sphere and you're back with Henantier again.
Looks kind of like the Oblivion equivalent of the Arena. On your left is an Ayleid Chest called "Prepare". In it you'll find a full suit of Leather Armor and a full suit of Steel Armor. Take whichever one (or none) fits your skills. You'll also find a Staff with a targeted electrical damage enchantment (44 charges), a steel claymore and an enchanted axe. No Blunt weapons. If Blunt is your thing, you'll either need to use the sword or axe or fall back on your fists. Once you're suited up and properly armed, go forward and the gate will drop, letting you into the Arena.
You'll have a couple of leveled Minotaurs to contend with (they should be about a level less than you). I've always found that the Staff is more than sufficient for the job, especially at lower levels. Well, "sufficient" as long as I don't let the Minotaurs get within melee range. At higher levels, the Staff is enough to put one of them down and put a serious hurt on the other, but I might need to clean up with one of the weapons if my aim wasn't too good.
Once the last Minotaur is dead, a set of stone steps will rise and let you get to the spectator's area where you can grab the glowing sphere and rejoin Henantier.
I find this test to be the most maddeningly difficult. Probably because it's very easy to get turned around, go in the wrong direction and drown before you can get where you need to be. You have to swim a long underwater path to get to the Grotto of Courage where you can retrieve the last sphere. You have a weak potion of Water Breathing in an Ayleid Chest at the beginning to help you part of the way and there is a second potion in another chest when you get near the bottom of the long shaft down. This is one of the times when a really good Athletics skill can save your bacon. The path that you need to follow is by the chest with the second potion. Once you get to the Grotto of Courage, grab the glowing sphere and you're back with Henantier again.
This time, when you activate him, he'll actually makes sense. He'll tell you what the whole amulet thing was about and then transport you back to the real world (assuming that "real" is a term that can be applied to an imaginary game world).
The "substantial reward" that Kud-Ei promised you never materializes. The best you're going to get is a little something from Henantier ("I Survived Henantier's Dream World and All I Got Was This Lousy Scroll") and a 1-point boost to your Fame (and the skill boost from the book - you did read it, right?).