Darragh can be first encountered at the Last Light Inn, where he guards the entrance to the sanctuary and main plaza from behind the main barricade, below Terradissia and a few steps away from Elifer.
Resolve the Abduction
When Flaming Fist Marcus attacks the inn and attempts to kidnap Isobel during Resolve the Abduction, Darragh will more often than not fail the save and be Impaled for the remainder of the battle. If the party fails to protect Isobel, he and everyone in Last Light Inn will turn into a Shadow-Cursed Undead, save for Jaheira.
If the party successfully prevented Marcus from capturing Isobel at the Last Light Inn, and once the Nightsong has been freed from her cage and is headed for Moonrise, Darragh will follow Jaheira to Moonrise Towers. However, Darragh is killed during the fight against Absolute forces before the party can arrive. His corpse can be found within Moonrise Towers itself, down the staircase leading down from the entrance, in front of Disciple Z'rell.