Speak to the children dancing near the tents.
They talk about making “Bloody Bones” happy by obtaining the entire Bloody Bones song book. They believe there is one near the Ebon Dawn on the other side of the river.
Head to the Courtyard and kill the Ebon Dawn. One will have the “Ballad of Bloody Bones”
Go back to the children and give one of them the “Ballad of Bloody Bones”.
You will receive Gold, XP and the item “Ballad of Bloody Bones – The Servant to Mistress Valdis the Undying”