Whilst travelling in Lowtown, Act 2, at night you will be attacked by the Dog Lords. Eventually, after enough encounters you will be given a message to visit the hide-out. A map marker will direct you to a "Decrepit Alley" in Lowtown at night (Lowtown Bazaar).
Kill everybody in the "Decrepit Alley". Check all the corners for newly spawned enemies, then leave the area.