After crossing the railroad tracks, the wide trail climbs up into the coastal forest. Right away you will come to a fork where you can continue straight or turn right. Turn right and duck under the large metal pipe. The trail is easy to follow and has a nice view over Skagway. There will be trail signs with directions to Lower (Dewey) Lake Loop and Icy Lake/Upper Reid Falls, but you want to follow the signs that point to Upper Lake/Devil's Punchbowl.
When you leave the signs for Lower Dewey Lake Loop behind, the trail will start to climb steeper. The trail is still easy to follow and well maintained. You will be in the forest the entire time (4 kms) until you get to Upper Dewey Lake.
The trail is short enough to be a great day hike, but the view at the lake is pretty stunning, to make it a great overnight hike as well. The free cabin is dark, but is still fairly large and has bunkbeds and a stove. The rental cabin has lots of light, a covered patio, and a view over the lake. The rental cabin has 2 sets of bunkbeds on the lower level (which could sleep 4 comfortably) and an open loft upstairs (where perhaps 4-6 people could sleep). A kerosene stove keeps the cabin toasty, but you have to carry your own fuel up. Contact the Skagway Recreation Centre
to book the rental cabin.
There are a few options for exploring the area. A popular option is Devil's Punchbowl, a small alpine lake nestled between the mountains to the south. The trail to Devil's Punchbowl is 1.8 km (one way) leading south from the cabins (to the right if you are looking at the lake). From the viewpoint over Devil's Punchbowl there is a steep, rocky slope which you could climb to get a better view of the area below.
Another option from the cabin is to venture north (around the left of the lake) and climb a small ridge which eventually leads up to a much higher ridge. This is a longer side trip and can get technical if you try to get to the top of the ridge, as it is very steep and rocky. Even if you don't want to go to the top, you can get a closer view of the glacier on the side of the ridge and amazing views all around.
The hike up to the cabin in the winter is definitely recommended. Snowshoes will be needed. You should expect to add several extra hours to the trip, depending on recent snowfall amounts and whether any groups have been up before you to pack a trail. If you're trailbreaking you can expect the hike to the cabin to take up to 5 hours (bring headlamps for the reduced daylight hours). The way down will be a lot faster.
If you're planning on venturing out from the cabin you are essentially in avalanche terrain and should have the necessary gear and training. Several avalanche slide paths have even reached the lake.