Where is the key for the side quest?
The most reliable place at the moment is probaly from gold slimes but those are rare enemies. In the next patch they will also be able to drops from metal enemies just forgot to put that in, sorry about that! It also can found in normal treasure chests but the odds are not that high. If you already can go into the nothern plains there is a dungeon where you have a good chance of getting it from treasure chests.
It can be found in town at night but a specific tf form is required to reach the place. Also you can get hints for where to find tf forms if you look in the Forest of Beginning.
Hope that helps and thanks for playing^^