The company of the damned followed the main street of Vallaki, relatively idyllic in its evident tranquility, towards the manor of the town's posadnik, Baron Vargas Vallakov. The eaves of many of the buildings were festooned with the remnants of some sort of festival decorations. On the way to the manor, they passed a tavern called the Blue Water Inn, and at that very moment two unusual individuals—and evidently not locals—stepped out from it: a man, drearily-dressed like a Barovian but with the demeanor of someone unaware of his current situation, and a sylph-like waif of a young woman. The party learned that these two had ended up in Barovia under similar circumstances and stepped into the inn to discuss things further.
They found the inn an unusually warm and inviting place and rented a private room where they could speak without unknown eyes and ears upon them. The two new strangers introduced themselves as Lazlo and Efa—or, as she preferred to be known, "Puck." Ismark explained the dire situation to them but also detailed his rationale for why he believes that the strangers could possibly return to the world of the living intact:
"You may think me mad or too full of pride for thinking that we can escape this prison, but hear me out… The priests say that we are living the punishment of our ancestors' sin. Some say that, one day, Barovia will be returned to the world, our debt repaid. Some believe that we shall never repay this transgression—these folk have lost themselves in hopeless despair. Not I. How could any god worth worshipping be so cruel? So it must be possible for Barovians to return to the world of the living.
"We know that the athinganoi travel the Devil's lands freely as easily as passing through a gate—but who controls this gate? The Devil! He opens the gate for the athinganoi and keeps it closed for all else. The athinganoi even cross between his realm and the world of the living. How is that possible? It means that it must be possible for the living to enter the realm of the dead, so why should the dead not be able to enter the realm of the living?
"It is not such a ludicrous idea. So many damned souls have been brought to the Devil's realm, just like you. They fought against him and failed, and now their souls are doomed to repeat their doomed march to his castle night after night. But when they were brought here, they had some kind of life—and you prove this. You have a body that bleeds like any Barovian's. So if we can find the door to this prison, maybe you can leave, too! If the devil can be defeated, maybe even death itself can be."
Though it seemed an impossible task, they had already been given glimpses into a future in which escape was in their grasp through the words of the old seer, Madame Yeva. Deeming each other trustworthy enough, the two groups joined together.
Perhaps lending weight to Ismark's argument, there was another foreign guest in the inn: a carnival ringmaster from the Four Corners named Rictavios, who had traveled the land far and wide. He had been staying at the inn for a month at that point, sharing tales of faraway lands and foreign curiosities to entertain the despairing locals. According to his tale, he had—following some rumors—traveled through caverns far beneath the Kingdom of Earth and found a shadowy, mystical portal. Knowing that a life without risk was not worth living, he returned with his horse and wagon and traveled through… Though he realized that he was now as trapped as anyone else, he suggested that, perhaps, a higher calling had brought him to Barovia. Despite Rictavios's assurance of their authenticity, Yaroslava felt that his stories were highly dubious.
Before the strangers could leave, the inn's owner, Davian Martikov, made an offer to them. Seeing that they were highly armed, he asked them to check on why the recent wine shipment was so substantially delayed. In return, he offered free room and board if they could return with the shipment. And as long as they were looking around, he asked them to keep an eye out for his best customer, Bluto Krogarov, who had not visited in a week or more.
Before the group reached the manor, Yaroslava noticed a man who seemed to have been following them since they arrived. She informed Mao-Ying so that he could keep an eye out, and the giant walked directly toward where the man had been spotted. Cornered, the man revealed that his name was Ernst, and that he kept an eye on any strangers coming into town, since they always bring trouble with them. Seeing an opportunity, Lazlo paid Ernst a small sum as incentive to come to them if he saw anything unusual, and he let the man on his way.
The baron's home was, in relative terms, abuzz with activity, as peasants came by delivering bundles of twigs. The party was invited inside and led to a den, where the baron would meet with them. On their way in, they saw the foyer and hallway filled with bundles of twigs, and the dining room was filled with women of various ages working with different craft projects in their laps in between stuffing their faces with cake. Lazlo sensed something amiss and cast a spell to make himself invisible so that he could investigate.
A well-dressed woman moved about the room, discussing—almost to herself—decorations and costumes for an upcoming festival. The women at the table seemed to lack any life in their eyes or interest in their work. Lazlo made a distraction to lift a piece of cake, but there were too many eyes in the room not to notice a pastry rising into the air. One of the women cried out in surprise, and Lazlo stuffed the cake into a pouch and ran from the room as he begin to think that the cake was, perhaps, less sinister than previously suspected.
The baron made his entrance just as Lazlo resituated himself. A man of no great height but barrel-chested and with a confidently self-assured demeanor, he greeted his guests flanked by two large, gray mastiffs. While he was not pleased with the reverence showed by all of his guests, the more decorous ones were able to smooth things over enough for him to sit and talk with them for a while, as the stuffed head of a great brown bear hung on the wall behind him. He assured them that they would be safe in Vallaki as long as they did not serve the devil Strahd.
It was the first time that the strangers heard this name pass through the lips of a Barovian: "Strahd." Ismark jumped to his feet, wild-eyed, and cried, "You speak the Devil's name?! It summons him!" Annoyed, the Baron explained that they did not fear to speak this name in Vallaki so long as it was said with due disgust, and Vallaki seemed to be none the worse for it.
To everyone's surprise, the baron seemed in high spirits, assuring them repeatedly that "all will be well!" He explained that Vallaki is safe under his guidance, and that the people even enjoy regularly festivals to celebrate their peace and security. More than simply providing entertainment, these festivals served a greater purpose: the baron explained his belief that, if the people of Vallaki all learned to feel joy again, God's grace would return to them and save them from their prison. Until that time, the strangers were welcome to stay in Vallaki as long as they caused no trouble and followed the laws.
Though Vallaki was safe, he reminded them to stay within the walls. Their butler and lady-in-waiting had recently gone missing, and since the guard could find no trace of them within the walls, he supposed that they must have left and fallen victim to the devil's minions. Seeing an opportunity, Yaroslava spoke with the baron one-on-one as the party was escorted out, explaining that she had served a noble lady in life and would be happy to offer services. The baroness, Lydia Vallakova—whom Lazlo had seen in the dining room—met with Yaroslava and was delighted by the courtier's charm and grace. She offered Yaroslava a place to stay in return for her assistance and companionship.
Having now met the posadnik and earning his blessing to stay within the walls of his town, the party dispersed into the town as light of day began to subside. Despite all of the assurances from the baron and her brother, Irina still seemed fretful, as though she felt eyes upon her wherever she walked…