So as per the DLC
Our current Hero will become ruler of Albion, and bear another child. This child will be the hero of Fable III, and be the one to protect Albion and someone/something/somewhere called Aurora
Another child? Geez, I've already got more bastard kids than the Hulk! (It's good to be the king!)
so... is all the DLC is, is a movie or something that plays the future? or what?
I think I can guess how it happened...
No, what happens is
You meet the merchant from the beginning, the one who sold you the music box, and he has you pretty much perform exorcisms on two cursed items. When you complete this task, you get transported to the Tattered Spire, where it is revealed that Theresa set this up. She is now using the power of the Spire to view all possible futures, and shows you the one I just mentioned so that you have an idea of your future. She then mentions she's always watching.
Oh no, that happens when you're doing the exorcisms (best to way to describe it). You buy the Dog-Changing potion from the merchant guy. It's a lot more in depth than I can describe.