This is probably the simplest of all the walkthroughs for this game, but it's definitely not the easiest dungeon to play. Simply make your way to the room in the middle wing of the inn, go to the westernmost room and rest. You'll then be attacked by lots of Undead, including 3 Vampires and Fetid Zombies, which are the hardest of all the Undead to kill. Good for some experience but not much else.
Once you've killed all the Undead head to the southern edge of the map and walk west until you see a large white rock on the ground. Approach the rock to get a Warrior's Ring that you dreamed of seeing someone put there.