The Party will find Ike in Ulgoth's Beard. He offers tours of Durlag's Tower. He charges the party 60 Gold to provide the tours. After accepting the payment, he move towards the Inn located in Ulgoth's Beard.
After agreeing to the tour in Ulgoth's Beard Ike begins his tour by standing on the stone bridge outside Durlag's tower, (between the outer and main gate) he must be spoken to whereupon he will move immediately outside the main gate (on the drawbridge). Again he must be spoken to, and he will now move inside. He must then be spoken to five more times, the final time he will offer a wardstone, Whichever option you pick always ends in the Demon Knight will appearing and killing him. You also cannot lose any money as Ike will simply drop anything you gave him, and the wardstone if you did not purchase it.
In pre enhanced edition, killing of Demon Knight was possible via the casting of Greater Malison, followed by usage of Wand of Paralyzation, enabling the party a chance of killing Demon Knight. This event has likely been circumvented in the enhanced edition by the Demon Knight's magical resistance.