Upon first entering Dellston through the southwest gate immediately make your way over to the eastern side of town. The building in the southeast corner is the inn, which is run by Rita.
Keep an eye out while outside the buildings for a man in Mage's robes. This is Macitar, the commander of the Dellston forces. He'll sell you Mage spells once you've brought down the Troglodyte/Giant barrier.
To the west of the inn is a building with two empty shops. Enter the northern of these two shops and examine the wall in the southwest corner for a secret passage. There's a few traps in here which you'll have to disarm, but at the end is a crate containing a Steel Greatsword and a few other items.
West of the empty shop is a Common Armorsmith, which is the last thing of note in Dellston.