The quest will start automatically after you examine the torn backpack (M3,1) in the Longwatch Falls. His owner has been murdered and your task will be to find the person responsible for that.
Go towards the hot springs (M3,2) and find Ygard's journal near their western shore. After reading it you will learn that you should look for other clues in the cave behind the waterfall (M3,5). Once you walk inside, you will meet the Alpine Dragon.
If you want, you can attack and defeat the dragon. It won't be easy, as he is very powerful opponent, with a huge amount of health points, high defense and powerful attacks, and he is accompanied by few other strong allies. It's the strongest enemy you will meet in the whole The White March expansion pack. Once you manage to defeat him, don't forget about looting his body and his lair. There you will find large amount of very valuable items.
If you don't have a strong enough party, you can simply talk with the dragon. Keep selecting the first neutral dialogue option (the one that doesn't require any statistics) until you see the option to offer help in breaking the connection between his soul and the soul of Ygard. Finally you must select the option that requires 17 Resolve points. Only this option will let you avoid fighting. The quest will end successfully and the dragon will give you a very good hand protection.