Arcania: Fall of Setarrif ties up the loose ends of the main game's story and adds yet another chapter to the epic tale. After the demon that possessed King Robar III was exorcised, it made its way to Setarrif to find a new host. In Setarrif, which is cut-off from the rest of the island, chaos and anarchy spread rapidly.
King Robar III is troubled by these facts and is afraid of losing the city and some of his companions, which are in Setarrif at that very moment. The nameless hero therefore is sent by the king and must journey to Setarrif but he has no idea of what lies before him.
Source: Wikipedia, "Arcania: Fall of Setarrif", available under the CC-BY-SA License.