Honoring Tug is a quest in Leliana's Song.
Walkthrough[]
After finding Tug's corpse, a weapon rack nearby will have his axe in it. It can then be given to either Sketch or Silas Corthwaite.
Rewards
If you give Tug's Edge to Silas he will declare "Now this is a weapon." and gains 3000 experience points, but Sketch will be somewhat upset stating "Hope you know what you're doing, trusting him with that."
If you give it to Sketch he'll gain New Ability: Inspired: Major Magic giving him a +2 bonus to his spellpower, but Silas will grumble "Could've used that."
The description of Tug's Edge changes in its three forms (Tug's starting equipment, giftable item, gifted weapon), progressively hinting at how a dwarf came to be in an Orlesian bard's company.