Celestine Whateley and Thomas Jackson decide a trip to Dixon is in order, taking Doctors Ashley and Freeborn along. They find a tiny fishing village of no more than two dozen houses, a tavern/general store and a small chapel, all surrounding a dilapidated wooden dock where a couple of small fishing boats are tied up. A hand-written sign on the door say that the tavern is “Closed Until Further Notice.”
Entering the tavern, the investigators see signs of a recent brawl: broken glass, overturned tables, small amounts of blood and vomit. They check the back and find three dead bodies — presumably the owners or staff, judging by their clothing. It’s not obvious how they died, but Detective Jackson estimates they’ve been dead more than two days and less than a week. The general store side of the business seems to have been looted. The cash register lies smashed on the floor and the shelves have been stripped of canned and boxed food.
Next they investigate the chapel, the cleanest and most well-maintained building in town. Standing outside, Dr Freeborn guesses that it’s been converted from its original Episcopalian roots, pointing out where a cross has been removed from over the door. Inside, they find a single room with wooden pews that would seat about 50. A lectern and altar table stand at the far end, under a large wooden eye where a cross would normally hang. Dr Whateley recognizes this as the Eye of Dagon, the symbol of the Esoteric Order of Dagon, the same cult that ruled the neighboring town of Innsmouth before the federal raid in 1928. The lectern apparently once held a book, judging by the thin broken chain. They also spot a velvet-lined shelf on the back side of the altar table, but there’s no sign of what was kept there.
The investigator then go house to house, finding more bodies in similar condition to those in the tavern. After ascertaining that there are no survivors, they make their way to the nearest telephone (a few miles away in Ipswich), where Jackson reports the discovery to the sheriff’s department. Statements are taken, and the bodies removed to the hospital in Ipswich for autopsies. All told, there are 34 bodies. Sheriffs deputies estimate the population of the town between 50 and 60.
Prelimiary autopsy results seem to show that the victims all drowned, despite being found on dry land with no sign of anything they might have drowned in. There is salt water in their lungs. This detail is kept out of any official statements, which instead say only that the deaths are unexplained at this time.
The next day, Coast Guard patrols turn up a couple of the missing fishing boats, including the Silver Star, registereed to Elihu Smallidge. While the other boat is abandoned, the Silver Star’s crew are all aboard, dead, with their throats cut. Elihu himself does not appear to be among them. At least one boat and half a dozen men remain unaccounted for.
Whateley and Jackson head to Kingsport to have another chat with Lem Finlayson, to see if he can explain why he told her that Dixon “ain’t there no more.” He tries to pass that off as a sailor’s expression, and to say that the whole story of the Cordelia was “just a yarn,” but she’s not buying it. After she mentions the Eye of Dagon, he gets scared and tells her to not even talk about such things, much less go poking around. After she makes it clear that she’s not going to let it go, he fills her in on what little he knows.
In summary: Elihu Smallidge was the head of the Esoteric Order of Dagon in Dixon. At least one other branch exists in the area, though not in Innsmouth. To understand what happened in Dixon, “you’ll need to find out where Old Smallidge is and what he’s done with the Red Box.” “Not a man alive” knows what’s in the Red Box. “If you recognized the Eye of Dagon, then you’ll know that they’d be reading from the Ponape Scripture.” Finally, when asked how he knows all this information given that he’s clearly not a cultist himself, he says, “Well, ask yourself this. Where does Old Lem spend his time, keeping his eyes and ears open and his mouth shut?”
After he leaves, Dr Whateley sighs. “Great. I’ve got cultists on both sides of my family.”