Speak with Noosey to learn about the Arena of One, and then head inside the hatch that is marked so cleverly on your map. Once here, head outside and look for an NPC named Noosey.
The first thing you need to do to remove your Source Collar is make your way into the kitchen at Fort Job. In fact, it’s going to take you a good few hours to reach the point where you can actually remove your Source Collar and start throwing around magic spells.
Removing your Source Collar isn’t a twostep process that ends early in the game.