Gift from Xhost, the last outer plane creature you can pull during Zaviak's Vision Quest, for exchange of his life. Starting at the enchantment level of 5, each hit drains the level, to a usefulness of none. And yes, you've been tricked by the demon, remember the lesson well.
This onyx blade pulses with a sickly green light. The hilt is carved of bone and the pommel resembles the grinning skull of a gelugon. Demons rarely give gifts to mortals, and those they do always possess some sort of drawback.