BF => if you go from the traders onwards over the bridge, you see the dungeon entrance to dungeon 1. Dungeon 2 is on the next island, you have to cross a bridge in the east again. Same for dungeon 3 => again over one bridge in the east.
These keys open dungeon entries, and you have 3 of them in Act 1.
BF quests are solved in the BF of the current act. Items/boss enemies are located in the smallish lvl 3. Random: you have several items/enemies - or none - or one.
Luck: the average of both luck components (char+DK) determine your chance to find better items.
