You'll find Delorus in the holding cells on the third floor of fort joy. He's being tortured by the Houndmaster and his goons.
Defeat the Houndmaster and heal Delorus and he'll tell you how to get out of the fort. You can kill him by accident very easily so do not use aoes on the houndmaster right away, lure him away.
He later shows up on the Nameless Isle if he survived Fort Joy, telling you how he follows Alexander and asks for help returning to his comrades located at the Elven Temple.