Ok I've beaten Skalen the dwarf once to receive the spear head but after beating him the second time he says I won the sword of the warrior princess X(something). But he never gives you the sword! After the 3rd game he gives you a quest item cloak thing... where is my sword?!?!?!

(Edit) I loaded up my game to right after the first match I won and if you play him twice in a row and win both games without refusing to play he gives you the sword and cloak. But don't get excited because it turns out to just be a rusty steel sword with 6-10 dmg. Nothing special.