After Pelagius left, J’Zhirr speaks to the jolly man. He turns out to the Sheogorath, the Daedric Prince of Madness. Suddenly the old man’s words start to make sense.
Sheogorath talks too much and is easily distracted. But finally, J’Zhirr manages to deliver the message and gets him to agree to end his holiday. Sheogorath says he will leave but first J’Zhirr must find the way out. He reveals that we are now in the mind of a dead, homicidally insane monarch, Pelagius the Mad. To help with the task, Sheogorath gives J’Zhirr a magical staff called the Wabbajack. It has three faces with open mouths carved into the tip. The faces sort of resembles Sheogorath.
There are three paths leading off from the tea party area. J’Zhirr will take the first one and sees what happens.