Far Cry 3 Down in the Docks follows Piece of the Past in the main story quest. After you find a compass on the Nostalgia you are set off to find other clues that will finally leads= you to ancient knife.
In order to do that, you need to follow the compass to locate the entrance of bunker where the next clue is.
Go talk to Buck.
After you finish the last main story quest you will be on a beach near the Nat’s Repairs pirate outpost. It would be useful to take this outpost since there are no nearby fast travel spots. If you set the caged animal free it will help you take the post, distracting nearby pirates. After you conquer it you can find Buck west from your position. Keep going west until you find Buck standing on the quest objective mark. He will start talking about History of Isle and the lost treasures.
Enter the bunker.
After Buck is finished with his history lesson you will need to enter the nearby bunker and find the missing compass part. Head towards the bunker door and head inside.
Reach the submarine dock.
Upon entering the first room you will find yourself caged without a noticeable exit. This room is full of money and loot that you will want to keep an eye out for as you are escaping. If you want to get out of this room you need to first start climbing on ropes that can be found above white letters on a wall. After you climb up keep going forward until you find a broken console. Near the console there is a second rope you need to climb.
Find the cave entrance.
Upon leaving the water pipe you will find yourself in a big submarine dock. Swim through the sunk submarine and climb up at the underwater plateau. There are lots of pirates here you will need to kill. After killing them head to the end of the plateau and the cave entrance.
Find a way into the Chinese ruins.
You need to head through this small tunnel in order to reach the Chinese ruins. There are lots of pirates here you will need to take care of as you proceed. After defeating them all you will found yourself in front of the mined rock entrance. Activate the explosives at rock door with explosive console that can be found at the end of the red cable and proceed through the door.
Explore the Chinese ruins.
After heading through the doors you will reach the part where you need to jump in the water. Be on alert here since a crocodile is hanging out in the water. Dropping a grenade down will kill him and leave you without need to fight, otherwise you will need to fight him head on after you drop down. Heading forward you will come to a closed door that will lead you down into the next room. Further on you will find an underwater tunnel that you need to swim through.
Enter in the temple to find the treasure room.
Upon entering the secret temple and jumping to the next plateau the floor underneath yourself will collapse.
Find solution to reach the treasure room.
Finding solution to reach the treasure room requires you to flood the place you are at in order to make it possible to proceed to next part. In order to flood the room you will need to enter two rooms on your side and break down the three timbers that are holding down the wooden dam. The second room you head into will be already half flooded so you will need to swim underwater to open its door.
Enter the treasure room.
After the room is flooded swim to the surface and climb on a rope that leads you to next room.
Pick up the compass.
The compass can be found at the table in front of the entrance.
Find an exit before everything collapses.
Upon picking up the next compass part the door you just entered through gets closed off by collapsed rocks. Soon the temple will be destroyed and you need to run out before that happens. The path that will lead you to safety is at your west side. As soon as you get close enough you will need to keep using the appropriate button in order to make it through. At the end, Buck will help you climb up and you inform him about your progress.