Originally Posted by SiyusNL
I've found him in the inn of Whiterun I think, so it's just a random spawn.. He could be everywhere in any inn so just go to every inn and you'll find him eventually..
I found him here. I went to discuss matters with someone else for a little miscellaneous quest and while I was talking to this person, persuading, all of a sudden another misc quest came up on my screen telling me to have a drinking match. I didn't even know it was a Daedric Quest til it started. Was awesome!
He appears in any inn in the main cities.