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This quest is initiated from Charsi, who asks that you retrieve the Horadric Malus which is located in The Barracks. The Barracks is located beyond The Monastery, before the Outer Cloister waypoint. The Horadric Malus is guarded by The Smith who has high speed, although defeating him is not required for completion of the quest. Once the Malus has been retrieved, talk to Charsi who will agree to imbue one of your items. The item must be non-magical (white) and Charsi will make it a rare item with random attributes. The attributes are based on your level, so it is recommended to imbue you item at the highest level possible. Circlets are an excellent choice to imbue due to the attributes the item can attain.