First up: Max out the first level of your friendship with Opalheart. She is most off found at the Hearts and Sparks Shop, though she will wander around the west side of the town during her off periods. If you can't find Opalheart anywhere else you can always check out her house, just south of Town Hall.
Once Opalheart has warmed to you you'll see a request on the Bulletin Boards, asking Opalheart to meet with Xiao from Monday to Saturday, 15:00 to 20:00. Check out Hearts and Sparks Shop during these times and you'll see Opalheart angrily rebuffing orders from people outside Moonbury Town. She'll drive Xiao away, and you'll need to follow him down and ask for more info.
Head to Town Hall sometime between 9:00 to 15:00, Monday to Saturday. Xiao will intercept you on the ground floor and ask you to put together a package of materials for Opalheart. She needs the following:
- Five Silver Nuggets. You'll find these in the larger, glittering rocks on the fringes of Meadow Range. You can also get them from the black, normal-sized rocks up on Glaze Iceberg.
- Ten Lavender. Lavender grows in the southeast area of Meadow Range. Head east from the South of Meadow Range Fast Travel point to find them growing in relative abundance. (Though if you haven't been grabbing them already you'll need to make a few trips to get enough.)
Take the materials to Opalheart. As before, she's usually in the Hearts and Sparks Shop, and your dog can track her down if she's not around. Hand everything over to complete the quest and unlock the second level of your friendship with the blacksmith. Continue to befriend her and you'll also unlock the next quest in Opalheart's storyline, A Special Bond.