Dark Souls 2: guide to creating magical weapons
This is how magical weapons are created in Dark Souls 2.
We find McDuff and the Dull Ember
To create the magical weapons we will have to bring the "Dull Ember" to the merchant "Steady Hand McDuff".
McDuff is located in the cell from which you can access Tower Apart Bonfire, in the Lost Bastille. If you haven't found the key, know that there is another way to get to McDuff:
Grab the gunpowder barrel at the top of the stairs and place it near the cracked wall at the bottom of the stairs, then blow it up (fire bombs will be fine). This will give you immediate access to the Merchant's cell.
Now you will need to find the Dull Ember for McDuff, but be aware that this can only be recovered much later in the game, in Fort Ferreo. So if you're just starting out, don't even think about magical weapons.
Here is a video that shows it all.
Important: check out the Dark Souls 2 cheats and guides tab for other useful articles, such as the guide to unlocking all the Trophies, the guide to all the Covenants and many more.