Sorry this won't be an indepth SPOILER as I cannot remember the merchants name!
The merchant that you need to speak to is in the southwest corner, standing on the wooden platforms. He is rather round and bald.... approach him and speak about his rather special goods / services.
Hope this works.
PS you can upgrade the horn twice, the first time will cost money only the second time will invlove money and a gem, (if i'm remembering it correctly).
Cheers....Mine's a Beer
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