Diablo/Gharbad, the Weak

You will find this quest at the dungeons level 4.

Gharbad is a Clan unique demon that will not attack you, instead, he will beg you to not kill him in trade for a magic item. Just proceed your way killing some minions. After some time, head back to Gharbad and he'll tell you he needs more time.

Keep doing this method until he says that the magical item he made is too strong for you; Gharbad will betray you and try to kill you.

Simply destroy him. The hero shall say: "I am not impressed..." after killing him.