The sword is the key to the castle in the back of the zone. Be very prepared to die if you open the door though ;) Scroll up and look at the posts under the Black reavers and the Lords. They're behind the door.
This guy drops a sheild and a sword that looks like a D and is connected on both ends. They are both no drop, and one is Lore. I dont remember the stats on the sheild but the sword is 4/28. They arent very good, also they will disappear when you log. Happy hunting :)