I've been inspired by Pathfinder's Horror Adventures and White Box Gothic to create some horror movie inspired stuff for old school D&D. Here's my first creation. I think it would be an awesome weapon for a reoccurring villain.
This +2 machete (treat as short sword) is no longer a simple tool. Used in a series of gruesome murders, the vile blade is now a symbol of darkness and death.
The magical blade allows the wielder to defy time and space to reach his victim. His movement is increased by 5 when holding Killer's Caress, though they always appear to be walking slowly.
Once per day the wielder can do something menacing with the machete (such as lick blood off of it, or point it at someone and laugh manically) to cast Fear.