You will also find the Sword of Chaos in a cave that is located in the Dawarven Forest or near the Darwaven Village. It's the sword that I am using most often right now. Only thugs are gaurding the cave. A level three metorstike will kill the thugs easily. There is also an excellent short sword in Stormfist Castle. You will find that one in a chest at the end of Janus's bed.
