Online:A Gang of Thugs

Quick Walkthrough
#Find some Justice Neutral thugs in the alleys of Wayrest and confront them. 
#Loot a green-quality bag with a stolen item in it and use it from your inventory.
#Find Captain Mathias Etienne in the Wayrest Castle and speak to him.
#Head to the docks and knock on the drum.
#Confront the gang leader.
#Return to the Guard Captain.

Detailed Walkthrough
After confronting some thugs in one of the alleys of Wayrest, you will find that one of them was holding a bag which will appear in your inventory. Use the bag to see what is inside.
: 
:I should take the stolen items to the Wayrest Guard Captain.

With the quest underway, you will need to find the Watch Captain Mathias Etienne, who can be found in Wayrest Castle.
:''"You're new to Wayrest. Welcome. Even if you're just passing through, your safety's important to us. If you have any troubles, you just let me know and I'll take care of it."
:I did run into some thugs. I found these stolen items on one of them.
:"Again? These guys just don't get it. We'll turn a blind eye to some things, but not robbing people in the streets. We had an understanding with the Midnight Union, but ever since their presence started weakening here, we get these upstarts."
:The Midnight Union's presence is weakening? 
:"Yeah. I hear their leader, Hosni at-Tura's gone a little soft in the head. The Midnight Union's still here, mind you. Operation here's run by a Khajiit over at the Cloudy Dregs. I hear he's not in very good favor with his boss these days, though."
:Who are the upstarts?
:"They're known as the Backstreet Gang—your basic thugs, but there's nothing basic about their leader. Name's Ondre. They call him 'the Grinder' because he grinds up his victims. Wanted for dozens of murders. 
:Say, you want to do another good deed?"
:What did you have in mind?
:''"I got this tip where to find the Grinder. His boys contact him by knocking on this drum down by the docks.  None of my guards have the guts to go after him. Frankly, neither do I. If you're willing, though, there's a reward in it."
:I can do that. I'll find the gang's leader on the docks and kill him.'''
If you speak to him again, he'll say:
:''"If you decide to go after the Grinder, just don't let him get the drop on you. That would be the last mistake you'd ever make. Good luck out there."

Head to the Wayrest Docks and look around the warehouses for a drum, it will be on crate just outside a locked door. When you use it, Ondre will exit the building, expecting it to be one of his underlings.
:Ondre the Grinder: "Back so soon? Show me what you … wait, you're not one of my men!"

Once you have managed to kill him you can return to Etienne with the news.
:"I heard there was a ruckus down at the docks, They say someone chewed up the Grinder and spit him out. I'm guessing that someone was you."
:Yes. I killed the leader of the Backstreet Gang.
:"That's fantastic. The Backstreet Gang will scatter to the wind without the Grinder to hold them together. You just made my job so much easier. I guess you made Wayrest safer too. Take care, friend."

If you speak again after the quest.
:"Thanks for your help with that gang of thugs.
:''On to the next mission! I've got to see to this guard's needs. Good day!''"

 
Notes
Civilians may walk through the area while you're fighting Ondre.  Be careful not to hit them or you will get a bounty.
 

Quest Stages