It increases 5 points of your Melee skill (Sword, Axe and Club), and decreases your Shielding skill by 10 points for 10 minutes. It does not increase your fist skill and it can only be used by Knights.
Note: It will negate any fighting skill boost such as Enchant Party, Blood Rage or Veggie Casserole. Be careful - there is a 1-2 second delay for drinking this, therefore you can easily waste a potion instead of using the intended one. It does not matter if you drink 1 or 100 at once there will be no extra bonuses. Can be obtained from Gnomish Supply Packages.