Upon use, summons a sword that hangs directly above Isaac. As long as the sword hangs above Isaac, all item pedestals and items spawned from Machines and Beggars are doubled, spawning an additional free item next to them.
The extra item spawned will be pulled from the current room's item pool.
Mega Chests will also spawn an extra item if they contained items.
After Isaac gets hit once with the item activated, at any time with only a brief warning, the sword may fall, instantly killing Isaac regardless of his health. The sword has a 1/10000 chance every 4 frames to fall, so on average, 50% of all Damocles runs will not drop the sword until after at least 15 minutes and 24 seconds have passed.
The chance for the sword to fall does not increase beyond the first hit taken.
In scenarios that have multiple items to choose from (such as rare double Treasure Room layouts and Boss Rush), an additional set of items for Isaac to choose from spawns. Only one item from each set can be taken.
Having multiple Damocles active at once does not spawn additional items.
The only way Isaac can survive the falling sword is if he's invincible at the time it falls or, by technicality, with a respawn item. After the sword falls, extra items will no longer spawn.
Losing a life before the sword falls does not remove the sword or its threat.
Blood Oath: Getting stabbed by Blood Oath does not trigger the chance of falling.
Book of Virtues: Spawns a wisp on the middle ring, looking like a sword. The wisp's tears look like Spirit Sword's beams, but there are no other effects. Likely not fully implemented.
Butter!: Using active item will drop it and spawns an extra item pedestal on the ground; Getting hit may cause Isaac to drop the sword, removing the effect and chance of falling.
Clicker: The sword cannot be removed from Isaac's inventory.
Genesis: The sword does not get removed going to the unique Bedroom. It will then cause all the options to generate 3 additional items that can be taken for free, effectively quadrupling Isaac's items. Bonus active items can spawn on top of each other, making items next to them unobtainable.
Holy Mantle: Does not protect Isaac from death when the sword falls.
Isaac's Heart: Taking damage still allows it to fall, and the sword will still kill Isaac if it falls.
Jacob and Esau: The sword will only gain the chance to fall if the brother who used it takes damage.
Kamikaze!: Isaac blowing himself up does trigger the chance of falling.
Metronome: Can invoke the effect of Damocles, which will apply permanently.
Panic Button: Does not activate when the sword falls on Isaac.
Tainted Eden: Damocles does not reroll when damage is taken.
Tainted Forgotten: The sword will hang over Tainted Forgotten's body but will still kill the character despite being invincible.
Tainted Isaac: Damocles does not count toward his passive item count, and cannot be removed.
Tainted Lazarus: The character that used Damocles must be active for double items to spawn.
In the case of Boss Rooms, the character that did not use Damocles must fight the boss for it to drop double items.
Dark Arts: When in the shadow state, Isaac can survive the instant kill of Damocles, though this requires precise timing and can be impossible if Dark Art's charge is empty as the sword is falling.
Gnawed Leaf: If in the form of the statue, Isaac will be immune to the falling sword.
Tooth and Nail's statue form can also save Isaac, but the statue transformation time lining up with the sword falling is unlikely.
The Lost / Tainted Lost: Any damage the Lost would take is likely to kill him instantly, meaning that the item's downside is greatly mitigated. Dying and respawning, however, will still trigger the chance of falling,
Magic Skin: Spawns 2 items on every use instead of 1.
Mega Mush: When activated, protected from falling damocles.
Tainted Lazarus: If Tainted Lazarus takes damage, swapping to Dead Tainted Lazarus will cause the game to 'forget' that he took damage when he swaps back, and vice versa, making this item much safer than usual to use.
Given the 1/10000 chance for the sword to fall every 4 frames (0.133 seconds), Isaac has a ~4.4% chance to die for every minute of gameplay that passes after he takes damage with Damocles active. The following is a table for times Isaac could survive to after getting hit, along with the chances of reaching them:
Chance of Survival
2 Minutes 20 seconds
4 Minutes, 57 seconds
7 Minutes, 55 seconds
11 Minutes, 21 seconds
15 Minutes, 24 seconds
20 Minutes, 21 seconds
26 Minutes, 45 seconds
35 Minutes, 40 seconds
51 Minutes, 9 seconds
The item's appearance and effects are a reference to [the] Sword of Damocles, a story in which Damocles frequently praised King Dionysius's life of wealth and luxury, and is offered to switch places with Dionysius on the throne for a day to have a taste of his power. Damocles accepts, only to find that Dionysius had a sword hanging over his throne by a single horse hair to remind Damocles of the never ending threats to both themselves and their country that a ruler must deal with during their reign, causing Damocles to beg to give the throne back to Dionysius
The Damocles can be seen hanging over Isaac's head on the Antibirthalbum cover.
There are actually two different Damocles items in the game: one (item ID 577) is the active item that Isaac can encounter, and the other (item ID 656) is a hidden passive item that is given when the active Damocles is used and that carries out the item's effects. The passive Damocles cannot be encountered through any normal means, even via Spindown Dice or Death Certificate, nor does it appear in the collection grid. If spawned on a pedestal via the Debug Console, collecting the passive Damocles will immediately put the sword above Isaac's head as if the active Damocles were used.
In Antibirth, the more times Isaac would get hit, the higher chance of Damocles falling on Isaac's head was.
If Isaac drops his active item because of Butter!, it will also spawn an additional item next to it, allowing for infinite items to be generated.