Loki was freed from his punishment (having a snake drop venom in his face) by Odin, so he could accompany Odin and Thor to the Dreaming in order to petition for key to Hell as a way of avoiding Ragnarok. Loki tried to escape by posing as another god. Dream, however, was not fooled. He let Loki go, but Loki would owe him a favor.
Loki, however, being the creature he is, helped Puck kidnap Daniel Hall, which led to Lyta's revenge and Dream's eventual destruction. The Corinthian in his new manifestation, broke Loki's neck and took his eyes. Shamed he begged for death, but the Corinthian refused to kill him.
Odin and Thor then recaptured Loki, who tried to convince the Aesir that he had been captured by Dream. Odin scoffed at such notions and had Thor carry him back to his punishment. Loki tried to goad Thor into killing him by revealing that he has slept with Thor's wife, Odin, however, stops him.
Loki's wife, Sigyn, loyally stays with her husband despite his obvious disinterest in her.