The intro of the game tells the player about the recent events in city of Daggerford. Pwyll Greatshout, the duke of Daggerford, died during strange circumstances. To maintain stability, a new leader was chosen: baron Matagar Bugo, who promises the citizens to make Daggerford a new trading giant like Waterdeep. In the meantime, raider attacks on caravans become too often, and strange disappearings of cattle make people believe that hard times wait ahead.
The game begins with players working as freelance adventurers escorting a caravan from Waterdeep to Daggerford. Along the way, the caravan is attacked by a mysterious group and one of the player's party members, Talarenne, is kidnapped. He soon discovers that Talarenne was mistaken for an agent of Waterdeep who came to city in order to find out truth about Pwyll Greatshout death and the current political situation. The player decides to aid the agent.
The rest of the story follows the player character's efforts to rescue the missing party member and find the truth about what is going on around Daggerford. Gradually, an evil plot by Zhentarim is uncovered, and player has to do everything to stop it from fruition, or the city might be taken over... or even destroyed.
Source: Wikipedia, "Darkness over Daggerford", available under the CC-BY-SA License.