Once the screen fades back in, it briefly shows Jess rescuing Alundra, before another fade into Jess' house. Jess briefly talks about the shipwreck, himself and how diaries are used to save progress in the game. After this, head downstairs and out of Jess' house. After this, feel free to explore the village and talk to the inhabitants, though it is currently impossible to leave.
At this point in the game, the two most notable houses to visit are Jess' and Yustel's. At Jess' house, Alundra is able to save his game, while Yustel gives Alundra guidance on where to go as well as fully restoring his Health and Magic, and for a small fee, shows his destination on a map.
In order to advance, head to Meade's house and watch the short sequence, it will end Nestus asking Alundra to go to Septimus' house and bring him there. Leave Meade's house and head up the stairs, Septimus' house will be straight ahead. Head inside and talk to Septimus, after the short conversation, attempt to leave the house, Septimus will come over to continue the conversation. He tells Alundra that he is a Dreamwalker and asks him to head to Tarn Manor.
At this point, Alundra is free to leave the village, take the Northeastern exit from Inoa and head East. Head East again and take the Southern exit as soon as possible, jump up the small ledges to reach Tarn Manor. Some Murgg will attack Alundra but he will take no damage, at this point, enter Tarn Manor.