For Those Who Are Wondering:
I found out where 'weapon forging' is done.
Deep in 'the mines' (Darkness town), there is a lava zone. A metal door, when opened, says "Warning: Badass enemies ahead, sure you wanna go in?" (something to that effect). If you go in, all the random enemies on the map look like fire djinns, but are powerful fire-based monsters when you encounter them in battle. From a death knight that builds up stolen MP until he makes the entire battlefield explode, to a big red-claw lava beast that does a full-party fire swipe when cornered... They're all hard hitters, high on fire damage, and immune to most (not all) status ailments. Breaking Roar works, the Mage's Magic Reflect often keeps you safe from the AOE spells, and sometimes even Thorn Dance helps against Mr. Redclaw swipe.
They all drop an item called "Hot Nuclear" 100% of the time. Rarely they will drop more Obsidian (a -powerful- defense/magic defense armor stone) or Fire Crystals (35% fire damage resist... toss them in your armor to help survive these fire beasts) for you. Hot Nuclear says it's used in weapon forging?
On the VERY BOTTOM floor, where 90% of the area is hot lava, you will be jumped by 3 fire-boss monsters at once... be ready. On the eastern side of this area, there is a stationary fire-baddy guarding a woman in a blue crystal.
It's another group of fire bosses... yay. Defeat them, and you free her from the Crystal. SHE does the weapon forging! Some... goddess... thing. For 200,000 gold and 10 Hot Nuclear, she will forge a super-powerful, draconic weapon for you.
If you get a list of 4 weapons, each with the symbol for 'fire' at the front (it looks like a two layer campfire), those are the weapons for your party. If only ONE shows up, she's trying to make you a... bow... for some reason. Press the cancel button to go back to the menu of 4 good weapons, in that case. Who the hell is that bow for...?
REMEMBER: SAVE right in front of her, BEFORE forging a weapon. You can keep re-loading your save file until you get a modifier you like, like holy damage, or chance to paralyze, etc. Stats are also slightly randomized. Save scum to your heart's content.
These appear to be the strongest weapons in the game. Their names are orange rarity even at rank 0. Despite being Fire Based, they still do shittons of damage to these monsters, unlike normal fire attacks. Get the whip first, Climax becomes a crazy powerful attack.
The northern chest contains 1 Obsidian and 1 Fire Crystal.
That's all I got. Hope it helps.
