The Dragon Amulet unlocks special areas, quests, many powerful items and get more access to an expanding number of exclusive secret areas in the game. These areas contain incredibly rare and powerful weapons. As the game progresses, the Dragon Amulet will unveil more secret benefits including special story side-quests, the ability to speak in the language of the Dragons, and your ultimate destiny of becoming a Dragon Lord.
The Dragon Amulet is the signature item only belonging to the Dragon Lords. It's able to change the form, the primal element, and even the size of any dragon present in the area. It is also able to break through very strong spells and curses. It is said that it makes the owner become stronger due to the amulet's power.
Dragonmasters got a kind of dragon amulet as well, but it is fake. It lets the Dragon-master control a dragon... But if the dragon's power or its will is too strong for the amulet, the Dragon Amulet will actually break.