I also think IV is the best. The romans know how to use propaganda, and unnecessary cruelty benefits them more than us at this stage. Not killing them would also give us more options in the future, we can always kill them later. But killing should be avoided, because those who surrender must be rewarded, if we want romans in the future to be likely to surrender. What should be done now is probably to send the prisoners to some appropriate place in Sarmizegetusa where they can be held, but have guards who are ready to kill them at the slightest sign of any enemy approaching to try and free them. As for the roman auxiliaries, offer them a chance to join our side with good wage and free right to pillage any roman soldiers they kill or any roman city they raid if they join the dacian forces. For those who refuse, keep them prisoners under the same conditions as the roman legionaries - kill them if the romans advance too far and threaten to be able to free them. If possible in the future we should find a way to play on the card that the romans let the auxilia do all the dirty work while the legions are staying back, like at the battle of Tapae, but I see no such possibility at present.
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