it gives 1 point of energy damage (fire, ice, acid, lightning) depending on the breath weapon of the dragon. Its a non magical bonus, but doesent stack with any other bonuses of the same energy type.
Whats nice is it still works in a anti magic field.
Im playing a charicter that crafted a weapon from his murderd dead master (a silver dragon), and made a vow that using that weapon, he would find his murder and kill him with it. That vow was at level 1, and my charicter just got finished crafting the weapon at level 6. My charicter was the last charicter to get a mesterwork weapon, but its clearly the best weapon, as its a adamantine dwarven masterwork dragon crafted glaive.
Anyway, it may not be super powerfull, it is a very neet adiddition and for 300 gold getting an extra point of damage isent bad at all.