SPOILER WARNING (in case you didn't want to be spoiled)
How yall liking the villain reveal from the nightmares? I wasn't expecting it to not be a evil hunky wizard or something. I certainly wasn't expecting to ever wanna fukk Cthulhu =P
As you progress through the story quests you'll eventually start the "Lizard's Treasure" quest. You can view it through ur quest log, the scroll button next to equipment. Towards the later end of the quest you'll start getting nightmares some of which you need to sleep at your house to see. Just sleep and you'll meet him in the nightmares. How you react to him will determine what accessory he gives you as well
For real I did sus one or both witch(es) in dark swamp few built ago, specially night witch, we owe her a favor that we need to return in future ( just hope it not related to anything dark, or killing whole tribe) . But Cthulhu is kinda hot though, and we literally of f**k anything that moving or attack us (except slime,hornet,skeleton.. fews only), which make I not so surprise anymore.