Does anyone know exactly where they are? I've checked in the Bridge district during the day and at night, but I can't find them.

North end of the map down one of the alleyways, or at least that's what I read. Haven't gotten this quest yet so I can't be certain.

Syl...

I just finished this quest. They're right near the entrance where Aegisfield is, only on the other side of the building in front of you; you have to walk all the way around the building through the alley and into a large "clearing". I happened to do this at night, but I don't know if that matters...

Yep, once you arrive to the Bridge District you can go 'south'. There is a small gap between the Councilman's home and the Bridge District's wall. This leads to where the 'Fallen' ones and some local Ruffian's are discussing the finer things of life. Which of course immediately leads to bloodshed!