Go west in town till you meet the mayor, talk to him and he'll tell you what happened to the people. Follow the road (and pick up all the potions in the surrounding screens) until you see the scroll on the ground. Take it and head back to town. Use the scroll there and the animals will turn in real people again. Follow the road again, back west and keep going until you see another barrier. Go west a few screens and talk to the wizard and offer to kill the goblins. Go one west, kill the goblims and talk to the wizard again. The barrier will disappear now. Keep going north now, till you see the castle gates. Talk to the guard, and tell them you will kill all the goblins. Do so and come back, enter the castle, and you've finished this D-Mod.