This is a linux newbie here, so please be patient with me. I have installed Nginx onto an Archlinux virtual machine, and it works (perfectly well) as a reverse proxy to provide SSL and Auth to a farm of backend servers.

Now I would like to configure a location to serve WebDAV as well. I have understood that I would need to install https://github.com/arut/nginx-dav-ext-module.git. I cloned the git to my local machine, but now I am at loss. There is no archive that I could install via pacman. The module contains a C script, a "config" file, and a readme. The readme advises to issue this command ./configure --with-http_dav_module --add-module=/path/to/the/above/module but that produces the error /usr/local/bin/bash: No such file or directory.

I am sure that i am doing something extremely stupid, but the fact is, I am totally stuck. Is anybody prepared to walk me through the installation?

What you are getting there is simply bash telling you that no file called ./configure exists in that folder. There is no such file in the git repository. The README is explaining the options that you need to compile NGINX with in order to use the module.

You need to download the NGINX source code, extract it and compile it, using the flags shown in the README.