Enter the cellar of the abandon house in the SE Phantom Forest Swamp.
Agree on killing the other demon in exchange for the rune stone.
Jahan will level up, but lose his personality and will be reseted to the way you have found him. This means that you can keep some of your key water/air spells by unlearing everything but 3 (or was it 5?) of them before you talk to Balberith.
