The Eternal Dagger

The Eternal Dagger is a 1987 top-down role-playing video game published by Strategic Simulations, Inc. (SSI) as a sequel to Wizard's Crown, which was released in 1985. Players can transfer their characters over from Wizard's Crown, minus whatever magical items they had on them.
The story behind the game is that demons from another dimension are invading the world, and the only item that can seal the portal is the titular dagger.