If the party successfully prevented Flaming Fist Marcus from capturing Isobel at the Last Light Inn, and once the Nightsong has been freed from her cage and is headed for Moonrise; Rhed, along with Flaming Fist Helena, Nipawa and Ulthred will survive the first assault and assist the party in the remaining battle against Absolute forces.
After the battle, provided he survives, he and the remaining Flaming Fists will scout the Moonrise Towers Prison and enter a second battle against Myrkulites Duckie Verish, Sarabayle, and Willinx Jindlebee, aswell as a Death Shepherd and horde of Necromites. The party can assist in this optional battle and the Fists, and provided they win and survive, will continue to guard the prison until Ketheric Thorm is defeated.
After Ketheric Thorm is killed and the party leaves for Act Three, Rhed disappears from the game entirely.