Butcher is a Dunmer bandit chief residing in Cragslane Cavern, where he and his associates hold illegal gambling operations, using pit wolves as the bet material. The cavern is also the source of Sarthis Idren's skooma trade in Riften. They also sell moon sugar. He holds has the key to the pit wolf cages.
His location is to the left of the main room, which has the Barkeep and a few gamblers within. The Butcher and his associates' deaths, with the right quest, allow the Dragonborn to become Thane of Riften.