Dagmar was a peasant from Claywich, Velen around 1272. Like many others from his village, he worshiped the Allgod, as did his forefathers, not realizing it was no deity at all but a sylvan.
When the Third Nilfgaard War hit, the area fell on lean times and with nothing left to offer the Allgod but scraps not even fit for feeding to their dogs. The Allgod, incensed by these meager offerings, threatened to curse them if they didn't offer better.
If Geralt bargains with the Allgod: Thankful to the witcher, Dagmar and the rest continued to worship the Allgod, albeit with smaller offerings while the war continued.
If Geralt doesn't bargain: Sadly accepting they had no other recourse, Dagmar proceeded to offer what little food he had left in storage.
If Geralt kills the Allgod: Distraught, Dagmar and Preben proclaimed the Allgod said worse things would happen to them if he ever died and the two ran home to do a group prayer in hopes it'd save them.
If Geralt reveals the cellar: Dagmar and Preben eyed the now exposed cellar with curiosity and some time later, the cellar was covered up with no worshipers showing up at the shrine.