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You capitalize The if: It begins a sentence. It is part of the name. So if the inn is The Cloak and Dagger Inn, everything is capitalized (except the and of course). If the name is the Cloak...
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#4: Attribution notice removed
Source: https://writers.stackexchange.com/a/23676 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#3: Attribution notice added
Source: https://writers.stackexchange.com/a/23676 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
You capitalize `The` if: - It begins a sentence. - It is part of the name. So if the inn is `The Cloak and Dagger Inn`, everything is capitalized (except the `and` of course). If the name is the `Cloak and Dagger Inn`, then the `the` is not capitalized, as it is not part of the name. On the other hand, if the `the` does not _start_ the name, then it is not capitalized: `Inn of the Cloak and Dagger`. Hopefully that wasn't too confusing. ;)