Return to the shrine of Clavicus Vile in Haemar's Shame. (If one never returns to the shrine one can keep the axe and keep Barbas as a follower and have him in addition to another follower. Barbas is a good follower because he cannot die, go down, or take damage. Unfortunately, for stealth-oriented characters, he will see the Dragonborn in stealth and will get a bounty if he sees them steal, kill etc.
The quest can be obtained once the Dragonborn reaches level 10. A guard or Lod himself (whether "Some Light Theft" quest is completed or not) will say he has been looking for a dog and spotted one near the entrance of the city. Lod can be persuaded for half payment (25 can be received) or the task can be taken.
Barbas can be found west of Falkreath along the road beyond the fork where he will approach the Dragonborn. They can return to Lod once Barbas is found, hand in the quest and then return to Barbas where he is waiting.
Barbas can be a little tricky to follow as there is possibility to run into enemies. It is best to stay behind him to avoid losing him.
Barbas will lead the Dragonborn to Haemar's Shame where the Dragonborn and Barbas will fight vampires and their thralls together, depending on current level. Haemar's Shame is located directly in between Ivarstead and Fort Neugrad. There are few leveled enchanted items, an Arcane Enchanter and an Alchemy Lab. The Shrine of Clavicus Vile is located deeper in the cave, guarded by four to five vampires.
Activate the statue of Clavicus Vile and he will ask what he can do for the Dragonborn. Choosing any given speech option will result with his request to retrieve his axe from Rimerock Burrow. Barbas can be kept as a follower or told to stay. Behind the statue on upper walkway is a chest with leveled items and a chain that opens a barricaded tunnel leading back to Skyrim.
Rimerock Burrow is a small cave. At the end of a short tunnel, there will be Flame Atronach and Sebastian Lort, a Breton mage. He may summon a Frost Atronach. The Rueful Axe itself will be laying on a long table opposite an Arcane Enchanter. Behind them is a room with chest containing leveled loot.
The Dragonborn must now return to Clavicus Vile. They are given a choice to kill Barbas and receive the Rueful Axe or to spare Barbas and receive Vile's boon, the Masque of Clavicus Vile. Once the choice is made, the quest is finished, and the reward is received.(There is no quest option to keep Barbas but if desired one can just ignore the quest line and travel with him where ever you go)
In Dawnguard, one may come across Barbas and the statue at Haemar's Shame. He may still be there, depending if one has done this quest. During the Dawnguard mission, if Barbas is still alive he will try to kill the Vampires they are fighting. He never dies and therefore, provides good help.
This is one of the few Daedric quests where the Dragonborn is not supposed to kill the daedra's target in order to receive the artifact.
If Barbas is killed, Clavicus Vile will mutter, "He should have chosen a better companion."
If the Rueful Axe is to be kept, save before making the choice if this is the last Daedric artifact needed for the Oblivion Walker achievement. First take the mask so one will get the achievement, then load the most recent save file, kill Barbas and both the axe and the achievement can be owned.
Always add 360 , PS3 , and PC to clarify which system the bug appears on.
Click to show Bugs
If Barbas is addressed during the final dialogue, he does not join the shrine, and the player may not get the Masque.
360 If this quest is completed successfully with 49 dungeon cleared the Delver Achievement will be earned.
360 Barbas may stop randomly and not move during the quest. This may take place near Haemar's Shame or after initially speaking with him. To fix this, Fast Travel somewhere and on return he should have entered the cave. He might be found near the shrine later on. You can also shoot destruction spells at him and he will start moving.
Some times Barbas may have trouble when travelling through Helgen. He may proceed into Helgen, wander around and walk back out repeatedly.
Sometimes, while following Barbas, upon running into a Vigilant of Stendarr, Barbas will disappear. To fix this, go to Haemar's Shame, and the Dragonborn will meet Barbas there.
Lod may die in a dragon attack. If he dies, the quest cannot be obtained.
If you are on a PC, you can click on him while in the console (~) and type in "resurrect" (without quotes) to bring him back to life permanently or until killed again.
PS3 Barbas may run into a locked door and float up into the air until the door is unlocked.
360 Sometimes at the start of the quest Barbas will not appear, making the quest uncompletable.
If attacked while following Barbas, there is a chance he will go somewhere close and stop walking for a while.
360 At the very beginning of the quest while following Barbas, he may wander ahead while an enemy is encountered, and he doesn't stop to help fight. By making the quest primary and following the marker to Barbas, he can show up stuck in a glitch in the terrain in random areas. Hitting him with a few Destruction spells will transport him back to the nearest road, and he will resume the trek to the quest location.
During the final dialogue, if you speak to Barbas after choosing the masque over the axe, Clavicus may disappear, leaving Barbas in "real dog" form.
360 Sometimes you may not be able to use another beast follower (Dog, Death Hound, or Armored Troll) after the quest is finished because the game thinks Barbas is still following you.
While following Barbas to Haemar's Shame, he may randomly teleport great distances.
if already having killed the dragon attacking Western Watchtower but have not yet unlocked Falkreath, upon entering Falkreath a dragon will attack and there is a 70% chance that lod will be killed during the attack.(tested on 10 characters [ps3] where the dragon appears 99.9% of the time)
It is possible (though complicated) to obtain both the Rueful Axe and the Masque of Clavicus Vile by using Slow Time and having a house that contains a Weapon Rack. For this exploit, using Breezehome works the best, also the easiest way to obtain the Slow Time shout is through Hag's End.
Prepare for your exploit by making sure the weapon rack just inside Breezehome is empty and functioning properly, that the chain behind Clavicus' Statue is pulled and the exit is opened, that you have the Slow Time Shout unlocked and equipped, and that you have the Rueful Axe equipped as well. Note that loading an auto save while exploiting this bug cancels the in-game time, and that if it doesn't work the first time, you'll have to load your save from Clavicus' shrine.
After obtaining the Axe, Breezehome and Slow Time, head for Haemar's Shame, and position yourself behind the statue, next to the boss chest.
Initiate conversation with the Daedric Lord, and select the option to reunite him with Barbas.
As soon as you are able to exit the conversation, do so, and use the Slow Time shout. (this will lock your screen into one direction, as though he's still talking to you)
While Slow Time is active, (and Clavicus is still in dialogue) back out of Haemar's Shame through the exit behind you. Since your screen is locked, you'll have to run backwards towards the "To Skyrim" exit, passed the pull-chain.
Once you're outside, make sure the Rueful Axe is equipped and Fast Travel to Whiterun.
The moment you make it to Whiterun, use Slow Time again, and run to Breezehome's door. (Though your screen is locked, you can still access Breezehome due to the positioning of the house)
As soon as you get through the loading screen, and are inside, immediately move to the right to place the Rueful Axe on the weapon rack. (There is a brief moment here where your screen should be unlocked)
If everything was done correctly, shortly after placing the Axe on the weapon rack, you should get a message confirming completion of the quest. However, you must still travel back to Haemar's Shame to retrieve the Masque.
Leave the Axe for now, and head for Haemar's Shame. About halfway through the first section of the cave, another completion message will appear, and a note in the top left with say you've received the Masque of Clavicus Vile. At this point the exploit is done, and further exploration to the shrine reveals Barbas at Clavicus' side. Now you can head back to Breezehome and collect the Rueful Axe, which is no longer labeled as a "quest item" and can be dropped and picked up freely, as well as the masque.
Note that this exploit is finicky and may require several attempts. It has been confirmed for Xbox 360 as of Monday, January 7th, 2013 with all available patches and all downloadable content installed.
Confirmed on PlayStation 3 March 2, 2013 (with all patches and DLC's to date)
Confirmed on PC, April 18, 2013 (With all patches, all DLC's to date except Dragonborn)
Confirmed for Xbox 360 on Wednesday July 3rd, 2013 (With all current patches and DLC's)
Confirmed on PlayStation 3 July 27th, 2013 (with all patches and DLC's to date) P.S.: with all 3 Slow Time words will work better.