You will meet Yetka for the first time as you approach the gate to the Square of Heroes (where we fight the Commander). Speaking with her a couple of times will have her give you a side-quest to find her dagger.
The dagger itself is in the Northern Watchtower but at this stage we cannot access it just yet. In order to reach it, you need to enter the Southern Watchtower (the one closest to Yetka). After going down the first set of stairs, kill the Marauder and the Rogue and then approach the hole in the wall close to the stairs we came down, look over the edge to find a small platform with the North Watchtower key on it. Drop down and grab it.
Continue along the wooden walkways here, going through the small stone passage on the right) and continuing until you reach the far end. Climb to the top of the tower via the staircases in here and kill the Marauder and three Infected at the top before looting the item in the middle of the room for the dagger.
Return to Yetka and give her the dagger. In exchange she will give you the Key to the Catacombs and 800XP.