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Beginning of the Level
In order to go to the Stonefang Tunnel world, you will want to head to the archstone next to the first world's archstone. You may want to have fire resistance for this area, whether that is in the form of innate stats, equipment or a spell. Also, it's handy to be able to enchant your weapon (with turpentine or the spell) or use spells, but it's not necessary. Also, make sure you have a ranged weapon and plenty of ammunition for the boss. Before continuing on, it's also worth noting that I used a Knight character for the walkthrough.
When you arrive, take the stairs leading up. At the top, there's an NPC who you can purchase items from. After seeing his wares, move the camera so it's opposite him. Go along the path facing him, but you'll have to time your movements due to the rocks falling down. In fact, it's probably best to remove armor if your character is being weighed down.
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Killing the First Few Enemies
Once you've passed the falling rocks, move into the building and you'll see some creatures using mining picks. Not all of them will attack, so move ahead cautiously and draw the one that does attack back. That way, you don't harm the others which causes them to attack you.
After that enemy has fallen, a pack of wolves will rush forwards and attack you in the next room (they'll break the yellow jars). So, move forwards with your shield up. After they're dealt with, there'll be an enemy in the room they came from who uses fire attacks. Hug the wall outside of the room and when he flings a fireball, use your weapon with two hands and rush in. Try to evade his attacks, as you probably won't be able to kill him quickly if you went straight here after Boletarian Palace and didn't farm souls much in order to power up. You can use the environment quite easily to your advantage. After he falls, collect the items behind him.
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Opening the Way
After that, head back to where the previous enemy was and before taking the passage to the left, be warned that an enemy will ambush you. It's one of the miner creatures. So take it slowly and keep in mind that the passage is narrow, so it's best luring it back into the room. I also found that the enemies from one room back where the wolves were dispatched suddenly became hostile, so be careful about that as well.
After killing the enemy in the passage, head up the stairs and again watch for two enemies ambushing you. After they're taken out and you've headed up the next set of stairs, you'll face another fire flinging enemy. He's best taken out from range. So, take him out by the stairs so that you can roll down them to avoid his attacks. When you go across the bridge where he was, you'll fall down. Collect the soul here, head up the stairs by you and kill the enemy who attacks. After that, continue along the path and pull the lever. This'll open the way for you.
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Getting Access to Blacksmith Ed
Head back to where the bridge collapsed, collect the items where you killed the enemy and then head to the passage that opened up. Go through the fog and kill the firey creature on the wall to the right before heading up the ramps (it's easy to kill).
When you come to the wheel and turn the corner, there'll be more firey creatures in a room to the right. You can ignore them if you want. Regardless, when you're ready, go to the stairs and enchant your weapon with fire damage if you can and take out the three enemies.
Before passing through the fog here, go straight ahead and go to where the wheel is outside. Turn the handle, which'll give you access to a special NPC who can upgrade weapons and make new ones from a boss' soul.
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Extinguishing the Lava
Head back now and pass through the fog. An enemy will attack you at the top of the stairs. Proceed on after he dies. When you come to a large room full of ramps and such, take a look to the right and you'll see some items. You're free to try and collect them, but the plank of wood will collapse as you move across it. Regardless of what you do, destroy the red barrels here with ranged attacks when you're ready and go up the stairs. Move to the end and drop down, allowing you to bypass the enemies beneath you, and take the stairs to the left of them.
Fight your way through the firey creatures and wolves here slowly. Take the stairs down and kill the enemies you come across. Eventually, you'll come to a handle you can turn by a wheel. Do so and you'll find that some lava is extinguished, allowing you to pass by it.
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Reaching Armored Spider
Hop down from the ledge where the handle was. Take the stairs up and then go down the stairs where the water's flowing downwards. Collect the items here and take the stairs up. Now then, before taking the next set of stairs down, be warned that one of those enemies who throws fireballs is behind the red barrels. So that you don't get hit by the blast from the barrels, you want to proceed forwards slowly and let him destroy them all first, giving yourself ample room to jump backwards.
Once they're destroyed, run up to him and hit him with a two handed weapon or blast him from range. If you need to, use the bed by him for cover. After he falls, go through the fog and continue on. One enemy will drop down, but apart from that, the area's clear. When you come to the elevator, go up the stairs and grab the Kris Blade. Before taking the elevator as well, be warned that the boss is down there and I highly recommend having plenty of arrows etc.
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How to Beat Armor Spider
As mentioned above, the elevator represents the point of no return. So, before taking it down, feel free to head back to the Nexus and stock up on items or farm souls before returning to the elevator and tackling the boss. When you're ready, take the elevator down to Stonefang Tunnel's depths. If you die as well, you can always use the elevator you got working at the level's beginning as a shortcut. Also, I recommend having all of your item slots filled with recovery items, though they may not be needed.
When it comes to fighting Armor Spider, there is an easy tactic to use, even if some may frown on it because it does make the fight easy. After you've passed through the fog and the fight begins, stay close to the wall to the right (quite a bit behind the skeleton) and hit the boss with arrows. By doing this, you won't be hit often at all as the wall will block the boss' attacks very often, leaving you free to hit him with arrows and whittle his health bar down. If you prefer to kill him less cheaply though, simply move more to the centre of the passage and dodge the boss' attacks. You can also try meleeing the boss, but I've never killed him that way.
Regardless, he should fall after a while, which signals the end of the level.