I was playing through the main quest for about the 10th time and I just did the quest where you storm Elenwen's study/torture area and I finally took the time to read the dossiers. Reading through Ulfric's both confused and shocked me. From what I understood, it appears that Ulfric served as a sort of sleeper cell for the Thalmor after his subsequent capture, torture, and release. I have a few questions for the more lore saavy people on the forums.

First off, is the Markarth Incident mentioned in the dossier just Ulfric's capturing of Markath after the Great War or something else entirely? Second, did Ulfric really assist the Thalmor near the end or immediately after the Great War, and if he did, what exactly does the dossier imply that he did? To me it seems that he might have been brokering information or doing espionage or underhanded things, but the dossier seems really vague on that point. Also, it does say that Ulfric is now very uncooperative, but can still be contacted directly "under extreme circumstances" whatever that may entail.

Basically, I have always been a staunch Stormcloak ever since I played my second character, because in playing through the game, the Empire came off as a spineless group who surrendered to this haughty Thalmor who have since just kind of had their way with things. However, in reading through some lore on uesp.net, I found out that the Empire actually fought the Thalmor to a stand still and only took the peace treaty to end the fighting. Even though the peace treaty was complete crap (as it seems the Empire gained nothing from it) I would be more willing to accept the surrender knowing they fought them for all they were worth. The only other bone I have against the Empire is their compliance to any Thalmor demand, but it seems that Ulfric may share that same weakness with the Empire. If that is the case, I may have to seriously reconsider who I support.

So I guess I am just hoping someone can help me understand what exactly the dossier is saying. Hopefully, I didn't completely misconstrue what it was saying, and thanks to anyone who can help me out!

It's so funny with that dossier. Some read it as proof why you shouldn't trust Ulfric. For me, it was the other way around, it turned me from seeing Ulfric as an interesting but rather suspicious character to totally luuuve him, with faults and flaws and all

I think the torture bit really caught on to my sympathetic side, or something.

Anyway, as I read it, the Thalmor tortured him until he gave up information he thought was crucial for capturing Imperial City, but really was useless since the city already was sacked by then (but Ulfric didn't know that, of course). "He was allowed to escape" I take as meaning that they sinple gave him opportunity to escape, but he likely didn't know that either, but thought he managed to escape by himself (otherwise, they would have said he was released). It's of course possible he figured this out, but that's up to speculation.

The Markarth Incidence is when Ulfric and his militia retook Markarth from the Reachmen (who later formed the Forsworn). It happened about a year after the end of the war.

The dossier says that Ulfric was captured during the Great War by Thalmor operatives.

He was tortured by the Thalmor (Elenwen specifically) and they finally managed to prise information from him about the Imperial City but he was not informed that the IC had already fallen when he gave the information.

The reason they say he is an asset is not because he works for them (asset not agent!) but because their goals align.

Both Ulfric and the Thalmor dislike the Empire so as long as Ulfric is working against the Empire it is of a benefit to the Thalmor.

However it should be noted that if the Stormcloaks do win then Ulfric is no longer an asset to the Thalmor and instead becomes a threat. A Stormcloak Skyrim kills all Thalmor agents in Skyrim and actively works against the Thalmor. Unlike the Empire....

^This. He is an asset to the Thalmor because he is instigating the Civil War, weakening both the Empire and the Stormcloaks. The Dossier also says that the Thalmor want to war to drag on for as long as possible, so they can become stronger while the Empire/Skyrim weaken. To the Thalmor: Civil War continuing>Stormcloak Victory>Imperial Victory.

My personal speculation is that undercover Thalmor agents were involved in the Markarth incident, perhaps in helping to set up the deal between Ulfric's militia and the Jarl's family, in the hopes of creating a situation they could then use as an excuse to insist on entering the province to enforce the WGC after an Imperial failure to do so. It seems pretty clear to me that when he got away from them during the war he still considered them his enemy, otherwise there would be no need to describe his departure as an escape (whether it was "allowed" to happen or not). If he had been actively working for them or knowingly under their control they simply would have released him and their internal documents would reflect that; the rest of the world might think it was an escape, but there would be no need to keep up the pretense among those who knew better. So I don't think that he was knowingly dealing with or conspiring with them, rather that someone in their employ was in contact with him and able to use that contact to provide intel to the Thalmor as well as influence events to coincide with their agenda. Once the deal was struck in Markarth and the city reclaimed, the Thalmor "discovered" this violation of the Talos ban and proceeded accordingly.

Perhaps there was something about this oh so timely discovery that seemed a bit too suspicious, and any chance of using that or any mole to influence and keep track of Ulfric's activities after he got out of prison became impossible because he and his closest advisors no longer trust anyone outside a small circle of allied leaders (and the soldiers who prove themselves by actually risking life and limb for the cause). Whatever contacts they had were lost and they know better than to try it again under the current circumstances. Nevertheless it suits them to have unrest in Skyrim, so the civil war plays to their advantage as long as it continues. A swift victory for either side is undesirable, so they do whatever they can behind the scenes to fuel the flames while maintaining the pretense of not being overtly involved at all.

Extreme circumstances would probably include what was about to happen at Helgen, since Ulfric's death would bring an end to the war and they don't want that. So they were going to risk some kind of intervention which would put them into direct contact with him again, IMO that would probably mean trying to convince Tullius to turn him over to Thalmor custody instead of killing him.

I think the dossier is an endorsemant of both sides in the Civil War. Helping the Empire win keeps it intact and allows the Empire to turn their attention south. And if Ulfric wins, you have a guy with an intense personal and ideological hatred for the Thalmor in charge of a country. Which for the Thalmor would be what TVTropes calls "Gone Horribly Right".

First keep in mind the Thalmor mind, how they operate. They consider themselves gods, vastly superior to anything moving, and are steeped in the doctrine of being political manipulators and liars. They literally tried to take credit for the moons. Even in an internal document, every word should be viewed through that lens.

Even assuming the dossier is telling a sort of truth, it doesn't say that Ulfric is a sleeper agent. "Asset" is someone whom they believe they can use for their ends. Uncooperative and hostile to direct contact are the key words here. They are saying they hope they can use him, but need to do so through indirect manipulation, agents, proxies, etc.

It's possible they actually let him go. It's also possible he escaped on his own and Elenwen concocted a CYA story that they meant to do that. It's possible they had agents in Markarth who suggested the deal between Igmund (sorry, Igmund's father) and Ulfric so that they could then pull a "gotcha." It's also possible that they just found about it after the fact and decided it was useful to them. They certainly can't take credit for the civil war because their own document says Ulfric isn't open to their influence- the most they can do is try to use it to their advantage.

Hope this clears things up. The writers were very sly with this one. Like Lyn, it just makes me see Ulfric in a more heroic light. True to rebel archetype, his anger comes from suffering.

Asset != Friend/Ally

Edit:
Also, what she^ said.

Ah ok. Thanks for all the responses, that pretty well answers all the questions I had. I was reading "direct contact" to mean reopening existing lines of communication, when it was rather meant quite literally. I guess that is what I get for trying to read between the lines, lol. I guess now that I better understand the context of the dossier, I will continue to support the Stormcloaks (it works with my character's RP as well). I never liked the Empire anyway!

In the Thalmor's eyes, you supporting anyone is bad news. They do prefer you joining the Stormcloaks, though. It just further fractures their strongest enemy.

The part about them "letting him escape" comes off to me in a different way than anyone has said. Sorry if I make any altmer players mad. But this note in the dossier says to me that its the thalmors high elf blood being conceited as many of them are and them not wanting to say they lost a prisoner/broke out. So their saying they "let" ulfric get away.

That's not what the dossier says.

That's what I was talking about when I said that it was possibly a CYA story that Elenwen concocted to explain a failure.

Sorry I'm typically on my phone when reading on forums. Phone must have scrolled down too much and didn't catch that part of what you said.

http://elderscrolls.wikia.com/wiki/Thalmor_Dossier:_Ulfric_Stormcloak
Not directly, but it does imply that a Stormcloak victory is to be preferred over an Imperial one.