Bloodmoon:Disrupt the Skaal Hunt

Quick Walkthrough
# Wait until Hircine contacts you again to tell you about the ceremonial hunt for the Spirit Bear.
# Travel to the western shore of Lake Fjalding and find the three Skaal campsites. 
# Keep killing the Skaal trackers as they appear at the campsites. 
# When all the trackers are dead, wait around for the Spirit Bear to appear Southeast from the camp sites. 
# Kill the Spirit Bear. 
# Wait again for Hircine to contact you to receive your reward (a Summon Bonewolf spell).

Detailed Walkthrough
The Dream
Wait a while (about a day or two after the previous dream) until Hircine contacts you again. He will tell you about a ceremonial hunt for the Spirit Bear being performed by the Skaal. You are to kill all the Skaal as they track this Spirit Bear and then kill the bear yourself. The ceremony is being performed near the western shore of Lake Fjalding. Once the dream ends you'll find yourself in werewolf form again.

Skaal Trackers
It might be challenging at first to find the Skaal Trackers, but they are all along the western coast of the lake as Hircine mentioned. You should easily see three campsites in the area, all well lit (Site 1: -173300, 191500; Site 2: -170900, 194100; Site 3: -174000, 195000; all just north of the Gronn cave). The Trackers will appear one by one at each of the sites. Continue to kill them all as they appear (about 10 total). As a werewolf, you have the ability to see any creature/NPC on your local map as a red dot, which is very useful during this portion of the quest.

Spirit Bear
Once you've killed all the trackers and received the journal entry, you can wait around and hunt for the Spirit Bear. The bear is a large white bear and cannot be easily mistaken for the common bears in the area. It appears just to the southeast (within sight) of the southern-most tracker campsite shortly after the last tracker is killed (-172000, 189000). You'll receive a journal entry when you kill it. 

Reward Dream
Once the Spirit Bear is dead, wait around a bit until Hircine contacts you again. You'll receive his praise and a spell to summon a Bonewolf as your reward.

Notes
You need not complete this quest in a single night in werewolf form; the Trackers will continue to be hostile towards you as non-werewolf. You can fight them and heal between attacks as normal.
You can choose to kill the hunters during daylight hours, but more will only spawn at night. You are therefore better off hunting them at night to progress the quest.
Conversely, if you desire to trap the Lesser soul of the Spirit Bear and receive its Heart of the Spirit Bear item, you may rest until morning (6 a.m.) so that you are human and have regained the ability to soul trap and loot; because of the note above about the quest not proceeding unless you kill the trackers that spawn at night, it is recommended to work on soul trapping and looting the Spirit Bear after you have already completed the first half of the quest.
After completing this quest, you'll start seeing Horkers dying on all the northern shores of Solstheim.  This is related to the next quest.  Technically, they should be already dead, but the mechanics of the game do not allow for that.  So instead, you'll be treated to the sound of dozens of Horkers' dying moans every time you walk near the shores.  This will continue to happen every time you enter these areas from now on.

Quest Stages