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The battleaxe is one of four unique ghost weapons wielded by spectral variants of Draugr. These can be encountered only in Labyrinthian during "The Staff of Magnus" quest, with the exception of the Ghostblade found during "A Love Beyond Death."
It absorbs 15 points of health with each hit. As with all ghost weapons, it can't be improved at a grindstone, though it has unlimited charges and can be disenchanted to gain the Absorb Health enchantment.