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The Carnival of Death quest is triggered as soon as you pick up a newspaper with that very same headline (one is just outside your Haven at the apartment down the hall and another is on the second floor of The Asylum). Some sort of gruesome murder has happened at the Santa Monica pier, so you will begin your search for clues there.
Once you reach the beach through the parking ramp, head up two flights of wooden stairs to the main walkway on the pier. Take a left down the street until you come to a chain link fence. Here, you'll find a dangling body surrounded by police officers and your quest log will instantly be updated with some scant information about what you witnessed.
The next clue in this quest is gathered during the Mudd Hunt
quest. You'll be sent to a warehouse across from The Last Round in the Downtown district, where the scene of the latest grisly murder can be found. Speaking to a bum that witnessed it, you'll be able to learn a few more scant details about the killer. Apparently, he "grew claws" and said something about "revenge".
After your experience in Downtown, this quest will go dormant again until you visit room 6 in the Lucky Star Hotel for the Mudd Hunt
quest. At that time, you'll witness the murder of "Muddy Mike" Durbin by the same serial killer that you've been tracking. Unfortunately, the murderer will escape through a window, but a clue will be left... a Brothers Salvage
Return to Santa Monica, where you'll be visiting the Brothers Salvage junkyard right next door to the Sunco Gasoline facility. Caution is definitely in order here, since the killer is waiting for you out among the junked vehicles. As you travel through the junkyard, the unknown assailant will throw vehicles at you and even attempt to kill you with an explosion. Weave through the maze of junk until you finally reach the killer at the base of the crane.
The killer is very apprehensive, but will indulge you in some conversation. He'll explain that his family was butchered by thieves and that the murdering he has done is just a means for revenge and justice. If you attempt to convince him to stop killing and get on with his life, you'll earn a point of Humanity and two points of Experience, but will be hit with a Masquerade Violation. Otherwise, you can put him down for his evil ways and earn a Masquerade Redemption. Taking the violent route causes the killer to morph into some sort of monster, although the fight shouldn't be too tough if you're equipped with the lastest weapons and armor from the Hollywood district. Incidentally, an accurate blast from the shotgun at close range can send the killer into the fire behind him, which will finish him off quickly.