He plays a minor role at the beginning of this quest, upon entering the Blue Palace for the first time, he will be speaking with the court about his worries about something bad happening at Wolfskull Cave, prompting the start of the quest.
The Wolf Queen
Varnius: "I swear to you, unnatural magics are coming from that cave! There are strange noises and lights! We need someone to investigate!"
Elisif: "Then we will immediately send out a legion to scour the cave and secure the town. Haafingar's people will always be safe under my rule."
Varnius: "Th... thank you, my Jarl. Thank you."
Sybille: "Your eminence, my scrying has suggested nothing in the area. Dragon Bridge is under imperial control. This is likely superstitious nonsense."
Falk: "Perhaps a more... tempered reaction... might be called for?"
Elisif: "Oh. Yes, of course you are right. Falk, tell Captain Aldis I said to assign a few extra soldiers to Dragon Bridge."
Varnius: "Thank you, Jarl Elisif. But about the cave..."
Falk: "I will have someone take care of the cave as well Varnius, you can rest easy. You're dismissed."
- "Respect the law, and you'll have no trouble in Dragon Bridge."
- "Mind you don't cross Tassius. He's in charge around here."
- "Don't start any trouble and I think we'll get along just fine."
- "At least if you're going to cause trouble, go somewhere else, okay? Please?"
- He will make reference to a character who was cut from the game—he will warn the Dragonborn to be mindful of Tasius Tragus, who is supposedly in charge of Dragon Bridge.