Hale said, "The Devil is alive in Salem, and we dare not quail to follow wherever the accusing finger points!" What did Hale mean by this?
What this passage means is that Hale wants to investigate anyone who is accused of witchcraft, no matter who they are.
To "quail" means to shrink back in fear. In this case, he is saying that they must not be afraid to investigate wherever they see evidence (the accusing finger) of witchcraft.
Hale says this when two respectable citizens, Martha Corey and Rebecca Nurse, are accused of being witches. When their husbands try to argue, he shuts them down with the quote you cited.
It is because of this sort of attitude that Hale is instrumental in bringing about the trials.
Hale means that there is not doubt that the devil is in Salem, and because of this, he understands that everyone who is accused must be investigated, no matter their standing in the community. For example, they go on to investigate Goody Nurse and Proctor. Their goals are to find any sign that Satan is among them and stamp it out by killing or imprisoning those who would listen and fail to confess.