"Welcome, Guardian. I am Nichol. Since King Xero sent you to me, I know you can be trusted. He would only have sent you to me if he thought you were ready to learn the truth. I am not certain, but it looks as though the Great Evil has returned... if that is the case, we may already be too late. The only way we'll be able to fight back, is if we begin to harness the technology in the Nexus - an ancient but advanced structure, buried deep beneath Avalon. I sent John, an archaeologist, to study some ruins to the southwest. I think he may have found something. Follow your compass, and find John in the ruins to the southwest."
This is the first of many quests you will receive from Nichol in Chapter 2, and then again in Chapter 3. Leave Nichol's house and head towards the forest across from Lower Avalon. Use your compass to guide you to the ruins. Walk inside, locate John, and speak with him for the next quest.