So where's the "Knight's Underground" or can't you advance from the first town?
Knight's underground is down the stairs to the right of commander valen. (Where you trained in chapter 1)
On another note. Holy shit this third chapter is complete cancer.
Fuck these evidence quests, fuck these thieves, fuck the potion store. The creator of this game is an asshole. I've never seen a game this stretched out for absolutely no fucking reason before. It puts any of those walking simulators like Road Trip and Lida's Adventure to shame.
I can only imagine two reasons behind this:
1. He knows the content sucks and that there's very little of it, so he pads it out to make it seem, like this update was of a remotely decent size.
2. He a fucking piece of shit and wants to torture his players.