How to unlock: Talk to Abraham Finch on the Finch Farm (M3,1)
You will find a man named Abraham Finch on the Finch Farm (sector III). He will tell you about a lost sword and will ask you to reclaim it. It will not be easy, as the location of the sword is under the control of an enemy gang...
Before going for the mission, you can bargain the reward if you have Charisma points. By default you will receive 150 bottlecaps, but negotiating can increase that number to 200 and 400 bottlecaps. Ask Abraham about the quest details and you will learn that you should find his son at the destination - his name is Jake (optional objective).
Get to the marked location - the Saugus Ironworks. A large group of enemies is standing in front of the entrance - help yourself by blowing up the cars located there. Watch out, enemies love to use fire. Flame throwers and Molotov's cocktails are their weapons of choosing. You can enter the building only through the main door to the north.
Inside another battle with fire enemies will start. Many of them will also start attacking you with melee attacks. Go to the top, under the very roof and enter the neighboring room of the factory. Then go north. You will see a guard tower, your target is behind it (you should save your game now).
After walking through the door, you will see a group of gang members and Jake. If you have high Charisma, you can convince him to join you (or other way around - to become your enemy). If your skills don't convince him, then keep picking the "arrow up" option (the dialogue about the father caring for the son). Optionally, you can free the prisoner whom Jake should kill if he won't die in the crossfire.
No matter on whose side Jake will be, you will have to face few enemies. It is best to first kill the melee fighting enemy and the woman with fire thrower. Now focus on the main enemy - Slag - who has a power armor. Try to aim at the head and keep your distance - his weapon has a small range of effectiveness.
Once the battle is over, search the body of the enemy. You will find Abraham's sword. If Jake survived, he will return home on his own. You will find a Picket Fences magazine and Explosive Bobblehead (+15% explosives damage) in the place where Slag was standing during the cutscene. Now go back to the questgiver (you can use the key to the roof [near Slag] to be able to teleport to other location faster. However, watch out, there are few enemies on the roof.
Alternative solution: If you think that something went wrong and Jake is against you despite the fact that you wanted him to survive, not everything is lost. If Jake will survive while the rest of the enemies will die, during the cutscene he will have a "change of hearts" and he will beg you to spare his life. This will allow you to obtain a good ending.
Quest rewards: experience, sword, access to the settlement, negotiated bottlecaps (from 150 to 400) + 100 (optionally another 100 if you have brought Jake).