It's kinda out of the way. You have to beat the Mindflayer jerk as Celica after kicking his ass as Faylen.
After following the hunter lady's questline enough you unlock a dungeon in the swamp area run by a shady creepy guy. Return when possessing Faylen and use her staff skill to reveal himself as a mindflayer. Proceed to fight him (you'll want to fully level up Faylen beforehand).
After the fight you will get a ring shaped like a squid. Cna't recall if you get it automatically or you check the dungeon area afterwards.
Wear the ring in the swamps as Celecia and you'll eventually encounter a grey octopus thing. Let it take control of you until the special status effect meter maxes out. It'll bring you to the Mindflayer for a boss battle as Celecia.
My advice is to bring plenty of health, magic and anti confusion potions since it is a very tough fight. Win and he'll drop the AOE dark spell.