Antimagic Susceptibility. The knife is incapacitated while in the area of an antimagic field. If targeted by dispel magic, the knife must succeed on a Constitution saving throw against the caster's spell save DC or fall unconscious for 1 minute.
False Appearance. The knife can take on the form of a tiny red dragon when it wants or the form of an elegant knife as needed.
Knife. Melee Weapon Attack: +4 to hit, reach 5 ft., one target. Hit: 5 (1d4 + 1) piercing damage.
Bite. Melee Weapon Attack: +10 to hit, reach 10 ft., one target. Hit: 17 (2d10 + 6) piercing damage plus 3 (1d6) fire damage.
Claw. Melee Weapon Attack: +10 to hit, reach 5 ft., one target. Hit: 13 (2d6 + 6) slashing damage.
Fire Breath (Recharge 5–6). The dragon exhales fire in a 30-foot cone. Each creature in that area must make a DC 17 Dexterity saving throw, taking 56 (16d6) fire damage on a failed save, or half as much damage on a successful one.
Description
The soul of a great red dragon was stored in this ornate knife and has grown in size and ability overtime by adding jewels and precious metals. The more it grows the more memories, abilities and size. It may one day be a sword.
A tiny red dragon, whose swept-back horns and spinal frill define its silhouette. Its eyes dance with flame when it is angry and its whole body seems metallic.
I don't think this thing's Challenge rating should be 1