The Dragon Shrine is accessed by traveling through the Dragon Aerie, read up in that section for details on how to reach it. After crossing the bridge into the shrine, look inside the small crumbled stone structure to the left to find a bonfire. Up the nearby steps is the first Drakekeeper enemy (similar to sentinels from the Tower of Flame area early in the game). They are slow moving and telegraph their attacks quite obviously, but have large swing arcs and hurt when they connect. Lure their slow attacks and counterattack after dodging them. Look underneath the stairs where the drakekeeper was standing to find a pharro's device. When used, this reveals an illusion wall behind you. Attack the wall and open the chest inside to pick up a Staff of Wisdom (arguably the best mage staff in the game) and the Judgement Armour set (well worth the stone, isn't it?). The arch on the other side of this area leads to a chest with Bonfire Ascetics inside.
Head up the stairs to meet a drakekeeper holding a huge mace. A dragon shrine priest will be on the nearby tower to the right, taking potshots at you while you are in the open here as well. Take out the drakekeeper as quick as you can and head through the pillars on the left side of this small area to find a staircase that leads up to another drakekeeper and a walkway that leads up to that annoying priest. Head up and kill the priest (like any caster, he will go down quickly with a strong melee attack or good spell barrage). The body hanging on the railings here contains a Faintstone. From this tower, you should be able to see a slightly lower platform through a gap in the railings. Jump across and open the chest to the left for a Drakekeeper's Greataxe and Drakekeeper's Greatshield (you can also attack the mace wielding drakekeeper above with ranged attacks if you desire).
Drop down to the staircase below and climb to the top to confront two more drakekeepers. After defeating them, from the top of the stairs you just came up, look for a small walkway to the left with crates at the end. Smash through the crates and drop down to the ledge below. Drop down again to find two chests waiting. The one on the right is a mimic chest containing a Washing Pole and Petrified Dragon Bone. The other chest opens up to reveal a Titanite Slab. A door on the other side of this area leads to another room with a drakekeeper inside. A corpse in the alcove to the left holds Skeptic's Spice and a Twilight Herb. Enter the door the drakekeeper was guarding and inside the next room is a chest to loot for a Third Dragon Ring and an invasion by Dragonfang Villard. Thankfully the invader is an honourable opponent and will wait upstairs for you. Climb the stairs to find him in the room above. He is a melee enemy but attacks rapidly, so ranged attacks work best. Melee characters will want to use a good physical resist shield and have a fair bit of stamina to soak up his attacks. Once he is defeated, pick up the egg on the podium nearby (it can be used to join a covenant at the Iron Keep). Head out through the arches on the right side of the room and immediately turn left as you pass through to find a chest with a Watchdragon Parma inside.
Drop off the ledge here to land on a lower platform with another chest containing the Crystal Magic Weapon sorcery. Drop down again to reach the area where you fought the pair of drakekeepers earlier. The wooden door here leads to a small room with another door that opens onto a massive staircase. Enemies line the stairs all the way to the top, but the ancient dragon lies above. The first set of enemies is a pair of drakekeepers. Next up is a pair of dragon shrine knights (similar to black knight in previous souls games). They attack fast and are relatively easy to take out with ranged attacks. Heavy attacks will also keep them in stun-lock while you take them down. Above is another drakekeeper pair and finally a lone dragon shrine knight. Once the stairs are clear, enter the tunnel beyond to reach the ancient dragon. Talk to the dragon to obtain the Ashen Mist Heart (key item: allows you to enter the memories of ancient creatures). You can attack the dragon, but doing so is normally suicide. For a strategy for defeating the beast, look in the endgame content section. For those happy with their un-life, return to the bonfire and travel to our next destination. The Forest of Giants cardinal tower bonfire.... well, really the Memories of the Ancients which can be found there.