His default clothes are gloves, boots, and mining clothes. Derkeethus is a hard worker and miner, staying at Darkwater Crossing after being freed. He can be found working in Goldenrock Mine, the mining cave near the crossing. He also often can be seen sitting in front of the campfire outside of the mine. Though he is a friend to the Dragonborn, he will still (like any character) fight if attacked or command them to leave if in Annekke's and Verner's house.
While battling the shadowmaster and other Falmer in the boss room, Derkeethus will complain about there being another fight. After defeating all enemies, there is a secret lever to pull located just right of the trap door above Derkeethus. Then, follow the pathway until arriving at spiraled wooden walkways down to darkness, where he will talk to the Dragonborn and ask for freedom.
After freeing him, he can be recruited as a follower. If not, Derkeethus will eventually return to his home at Darkwater Crossing. He may be found working in the camps near Goldenrock Mine, even after marriage.
Initially after finding Derkeethus, he is dressed as a miner, even with a pickaxe. Any armor put on Derkeethus will be overridden by his initial gear (miner's clothes, boots) This has been changed since Dawnguard, however, and he will now wear any armor given to him.
When freeing Derkeethus, stand on the metal grate on the second floor directly above him in Darkwater Pass where he can be seen in his prison. Stay there and wait for at least one hour, and he will dislodge from his prison and stand above the grate.
Rarely, if knocked out and limping, Derkeethus will regain full health, but stay on the ground. This can be fixed by harming him again until he's back at no health, as he will get up the second time.
Derkeethus may refuse to equip a different bow, even when given a Daedric Bow, he will only use his hunting bow. To get around this, part ways with him and quickly pickpocket all of his weapons. Then, the Dragonborn should allow Derkeethus to follow them and give him whichever bow they wish for him to use, and he will use it.
Another remedy to the hunting bow bug (only tested on Xbox with Kinect update) is to assign the new bow and arrows the Dragonborn wants to give to Derkeethus to their own favorites, this will then carry over when given to him making him equip and use them, however if told to part ways he will re-equip his original hunting bow and arrows, this can be remedied by removing the bow and arrows he was given from his inventory then repeating the first step.
If Derkeethus' hunting bow is removed from his inventory, it may still be visible on his back, despite there being no bow in his inventory.
If the Derkeethus is married, during the wedding, he may randomly sprint out the door back to his crossing. However, he will still be married to the Dragonborn.
PS3 If Derkeethus is asked to move in with the Dragonborn, he will agree, but will not move to their house. Instead, he will appear to start walking there, but will get "lost" and not reside anywhere unless asked to move again.
If given an Ancient Shrouded Cowl, it will not appear that Derkeethus is wearing it, but it will still appear that he has it equipped in his inventory. This does not work with the regular Shrouded Cowl.
Sometimes, the people of Darkwater Crossing will mention Derkeethus' disappearance, but there will be no dialogue option to start the quest. This will not affect the quest in any way, and it will still be doable.
If Derkeethus is recruited into the Blades, he may not reside at Sky Haven Temple and may not show up at dragon fights unless he is the Dragonborn's current follower.
When rescuing Derkeethus, it is possible for him to fail to emerge from Darkwater Pass. If the area is left and reentered, he will return to his cage and will slowly follow the Dragonborn if in close proximity, but will still not leave the area. This will render him unable to be fully rescued or recruited and the quest will remain incomplete (still confirmed as of 1.7 update). A possible solution to this is to leave at the upper entrance to Darkwater Pass (confirmed as of 1.7) (This does not work. Derkeethus must be kept in close visual range as they back-track all the way up the tunnels to the top entrance. Otherwise, he turns around and heads back to his cage. However, once out of the top tunnel, the Quest Arrow indicated to go back round and go back in via the bottom entrance. Regardless of the entrance taken Derkeethus is no longer in the caves and nowhere to be found.)
Solution (PC): Exit the cave using either exit. Target Derkeethus using the console. Enter "moveto player" in console. Derkeethus will be moved to the Dragonborn outside. Talk to him for quest completion.
Try resetting the game to a save before going in the cave, then clear the cave completely out and then released him. (Needs verification.)
PS3 Fix: After starting the quest to free Derkeethus, leave through the quest-marked door and he should emerge outside. Talk to him before he goes back inside and the quest should complete.
If Derkeethus is attacked to the point where he is grounded, he will get up and start running back to Darkwater Crossing. He can be stopped if he is caught up to and talked to.
According to the Creation Kit, after Hearthfire is installed, there's steward dialogue for the Male Argonian voice, implying Derkeethus is eligible to become a steward, but the dialogue doesn't show up regardless of which of the three homes in Hearthfire he is brought to.
When recruiting Derkeethus at Darkwater Crossing at night while he's asleep, he will say he will follow but instead will get up and then go to sleep again. - Tested on Xbox 360 only.