The Eye of the Blood Lord is obtained by killing the Blood Tyrant found in Akma Cave in Einhoren.
The Eye normally drops when he is killed. The Eye can be useful to Dragon Sages using both a Melee class item with magical abilities. Since the Eye of the Blood Lord is a blue named item, it cannot be traded in-game. It can only be traded through the exchange market. It is highly recommended any party's killing the Blood Tyrant to set the party's distribution to "Free" and have any Dragon Sages obtain the item.