Looking at your mini-map, the guild woods is on the right hand side, in the middle, it will be marked with a yellow quest directional marker. Go there to find the beetles. There are 10 beetles at the back of the woods, kill them to complete the quest.
When you leave the woods, you will have the option to move on in the story, or you can stay and do a couple things first. If you stay, talk to the guild master to move on to part 3 when you are done.
- Beating this quest earns you
- 20 gold
- 30 reknown