Hellhound

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The list of misfortunes that can befall the inhabitants of a village includes plague, war, and taxes. The worst misfortune, however, entails the appearance of a ghostly hellhound known simply as The Beast. Many bad things can be said about this creature, but they all come down to two things: blood and pain.

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"The hellhound, referred to also as the Beast, is a creature of the underworld, a specter that assumes the form of a terrifying hound and tirelessly stalks its victims once it finds their trail. Peasants believe that the hellhound embodies the vengeance of the gods, who send the Beast to punish humans for their wickedness."

Location

Outskirts

Sightings

Beginning of Chapter I, during the cutscene.
Leaving the crypt after discovering the poisoned girl inside.
Leaving Odo's house after completing The Secret Garden.
West of Haren Brogg's house, as you go up the hill with the bridge on the right.
Odo also claims to have seen it staring in the windows of Abigail's house.
On the road from the crossroads near the crypt going towards Abigail's house.
Sometimes appears at night when going to the cave south of the abandoned houses.

Source

Berengar's notes on the Beast

Notes

When fighting the Hellhound:

Use the quiet time with Abigail in the cave to brew the potions you think you might need.
Note that the battle with the Hellhound takes place at midnight, so if you want to prepare in the cave you should meditate until an hour before 12 before taking any potions.
You can run to the spot between the house and that little building beside it. That area is small enough to rest in without being attacked while your Vitality is restored.
If you take the "Stun" hero ability on your Aard there is a chance to stun the beast and kill him in one blow.
You can quicksave within the first few seconds of the fight, using this with Aard's stun ability you can easily quicksave and load until the Beast is stunned to perform a Coups de Grâce.
Specter Oil works very well to defeat the Beast and the Barghests. Abigail sells it.
If you kill the Barghests, the Beast simply summons more of them, so that is a fight you can not win. But when you kill the Beast, the Barghests extinguish like blown-out candles. So concentrate all your attention on the Beast.
The Beast has the innate ability to cause pain to Geralt, even if Geralt is attacking it and the Beast does not have time to attack. Unless you are immune to pain status effects, you will be hit with this effect during the fight.