Watch the cut-scene.
Once you get control, aim at the flame on the left, and then move directly right to reach the designated stars.
You will have a choice at the end which will lead to 2 different scenes. The left choice is probably the correct one but the scene you get by pressing right twice is entertaining as well.
Back at Ariela's Tavern, when you're ready enter the single room on the left, and talk to Dagran and choose the left option to go to bed for the night.
In the morning, there will be an event scene.
When you're ready to advance to Chapter 8, talk to Dagran and choose the left option.