Great Dagger

A great idea but shy of a wonder, the Great Dagger is perhaps one of the most ingeniously economical items ever produced. It appears to be naught more than an ordinary dagger, save for the large, red stone for a pommel. However, when one strikes with it, it is magically transformed into a two-handed sword. It hides well, and is light on the belt, but no more dangerous that an ordinary two-handed sword (which, of course, is in no way feeble). A simple, and yet surprising and powerful weapon. It appears in Ultima VII and Ultima VII Part Two.

Description
In the Britannia, one can be found at the Shrine of Sacrifice. Kreg at Empath Abbey uses another and there is one in the armoury in Serpent's Hold, among many available throughout the game.

Trivia

 * They can also be found on the Serpent Isle.
 * According to Vetron's Guide to Weapons and Armour, the Great Dagger has an effectiveness rating of 11 (same as a two-handed sword).