You're now located just below the Shadowling Camp. Talk to Uncle Falstaff and he'll tell you what you should do next. At this point, it is advisable to go south and talk to Uncle Falstaff again, then leave for the Academy, train up there and then come back, unless PsP and hp are both around 25, in which case proceed straight towards the Shadowling camp (in the north).
Once you get into the shadowling camp, there are several routes one could take to get to the commander's tent. One way is to go directly east, then weave your wave upwards between the outside and the first and second columns of tents. Taking a straight run without stops will inevitably get you noticed, so its advisable to make a few small breaks here and there, observing the guard patterns done by the Shadowling Sentries. It is also worth noting that you can enter the tents and hide in there, whilst the guards pass, but beware: some of the tents are not empty!
The commander's tent is located in the north section of the camp, but it's impossible to enter from the front, so you'll have to use an alternative way: on the east side of the tent one of the flaps is loose and you can sneak into the tent from that side. Once inside the tent, you'll be accosted by the shadowling commander- Noctus.
You'll have a choice of giving up your money or fighting for your life. In order to rescue your brother David, choose the latter. Note that Noctus' health is porpotional to yours, so training Psy Defense won't give you much of an edge over him; Instead, you should train your Psy Power as Noctus' damage will be consistent no matter how high you can deal. Try using a combination of Mind Blast and Mind Shield, if you have high Psy Power and Defense, this will deal consistent damage to Noctus and slowly reduce his health, while also making sure that your health doesn't decrease faster than his. Finally, after beating Noctus, try talking to your brother. You'll notice he doesn't respond and you'll have to escape with him via the abovementioned loose flap. At this point your mission is completed and you go on to meet Uncle Falstaff near your temporary encampment.