Instructions
Acquire the Horadric Cube, a quest item found during Act II in a tomb under the Dry Hills called the Halls of the Dead. The Horadric Cube is necessary to complete Act II.
Drag items into the cube. Specific combinations will result in upgraded weapons and armor or different types of runes and gems. For example, one Ral rune, one Sol rune, one perfect emerald and a normal unique weapon creates an exceptional weapon of the same type, and one Tal rune, one Shael rune, one perfect diamond and piece of normal unique armor creates a piece of exceptional armor of the same type.
Click on the Horadric Cube to open it.
Click on "Transmute" to upgrade the item. It will immediately be identified.