After completing Tranquility, go to The Hanged Man tavern. There will be a cutscene where Lucky and his gang are demanding payment from Isabela. After they are beaten by her, you can talk to her. She will ask Hawke to provide backup for a duel she has set up with an old acquaintance, who she fears will not play fair.
After the ambush has been dealt with, Isabela instructs Hawke to check the bodies for information on the location of Hayder. When the note is found, his location is revealed to be in the Kirkwall Chantry.
After making your way through more of Hayder's men, you confront him inside the chantry. He insistently questions Isabela about the location of the relic. When she claims that she lost it, a confrontation ensues, culminating in Hayder's death. After a quick conversation, Isabela becomes available as a party member and the quest concludes.
Hayder is likely the first Boss-ranked enemy you will encounter in the game. He swings a two-handed greatsword, which can deal the most single hit damage of any enemy. Against mages the blow itself may be forceful enough to interrupt them mid-cast. If he catches them during the final stage of a basic staff attack combo's animation (the "twirl" of the staff before jabbing it into the ground), his slightly faster sword swings may repeatedly interrupt the mage, leaving them unable to move at all while the game's programming tries in vain to complete the attack. On Nightmare difficulty this is certain death, so always keep the mages away from him.
On that note, Hayder's health means he is little better than a distraction while weaker enemies chip at your party. To avoid this, move the entire party up the stairs to the left at the start of battle, then hold position in the small chamber to the side. All of the enemies should target Isabela, who is invincible in the same way Anders was, so send a mage or archer down the stairs to aggro all of the enemies except Hayder. Lure them all the way back upstairs, as trying to use AoEs on staircase elevation is not as effective as on a level surface (enemies well within the blast radius can emerge unscathed by simply being two steps "below" the ability), then hit them with your strongest attacks. The columns should help disrupt the enemy archers' aiming and funnel them into smaller areas to target. One last thing to keep in mind is that on Nightmare difficulty the archers are immune to frost damage while melee units are not, so save your fire attacks for the archers.
This should spawn a reinforcement wave down below in the entrance hall, which will target Isabela. Repeat the process and clear out as many of his reinforcements as you can (when you start seeing Critter-ranked enemies you'll know he's run out of reinforcements), although by this point Hayder may break his attention on Isabela to chase your team with the reinforcements, while Isabela uselessly leaps after them. Take them out as best you can (it might behoove you to wait for your talents and spells to cool down before engaging the next wave), then manually control whichever unit Hayder targets to attack him, then quickly move away when he telegraphs the next swing of his sword. Eventually he'll see a different party member as the biggest threat, so change characters and repeat the process, trying to keep him near Isabela so she'll get some hits in. Aveline is great for this fight as she can Taunt him to keep attention on her, so manually controlling her should keep her off of Varric and other ranged characters regardless of how much they flank him. Aveline can get roughly two slashes in before having to pull back from Hayder's swing, at which point she can charge back in and land one or two more hits. Fortunately Hayder does not use healing potions, so with some patience and careful dodging he will eventually fall.
Notable items EditSailors' Rope Belt
+3% physical damage
+3 fortitude, dropped by Hayder The Bodice Ripper
Requires: Dual Weapon
Damage: 17 physical damage
(31 per second)
+3% critical chance
+7% critical damage, dropped by Hayder
Ironically, Hayder does not drop Hayder's Razor.
Isabela joins the party.
With Hayder's death, Isabela reveals that since Hayder cannot inform Castillon, their employer, about her lack of progress with the relic she will have to acquire it one way or another.