Well, Loghaire says something like "it strikes hard and swift in the hands of a dwarf, especially in the hands of righteous".
On it's own, it's damage is 0-0. So you won't get any experiance when you kill with it. It's a quite powerful weapon, though. I think Drog mentioned something about it being especially powerful in the hands of a dwarf with alignment 60 (or somesuch). Maybe he meant 60 and above.
Elf, alignment -50 or lower: D:1-5 FT:1-2 Elf, alignment -25 or lower: D:2-10 FT:2-8 Elf, alignment 25 or lower: D:4-18 FT:3-12 Elf, alignment higher than 25: D:6-26 FT:4-14 Dwarf, alignment -50 or lower: D:1-5 FT:1-2 Dwarf, alignment -25 or lower: D:2-10 FT:2-8 Dwarf, alignment 0 or lower: D:4-18 FT:3-12 Dwarf, alignment 25 or higher: D:8-34 FT:5-20 Dwarf, alignment 50 or higher: D:10-42 FT:6-24 Other race, any alignment: D:4-18 FT:3-12 It also takes into account your damage bonus and adds it to physical damage, but not to fatigue damage.
Damn, the damage is awesome for good dwarves with STR 20. 30-62 raw physical damage. Or is it capped?
Drog, the damn thing doesn't work at all in virgin Arcanum, does it? Every time I've used it or forced it to equip on a character that met any of those stats it did no damage at all.
No, it should work in the vanilla version. However, as noted, it does no damage on its own, all damage is done by script. Thus, NPCs won't equip it if they have another weapon, since they consider it worthless.