What we know as Damascus steel swords have changed in meaning since they first appeared in Middle Eastern warfare. The term Damascus steel orignated from the legendary blades of the swords made in Damascus. They were supposed to have been able to effortlessly slice through the softer steel of of European swords. These days the term "Damascus Steel" has been coined to describe forge welded blades.
This is not the page for swordsmiths. It is the Chinese Swords Guide simple explanation for martial artists or beginning sword buyers who are dazzled by the terminology and would like to know what they are buying or using when they see the term Damascus steel swords.
This video by yoona1991 explains it in pictures.
Several layers of metal are stacked together and welded into a billet. There are often different types of metal amongst the layers. Nickle and high carbon steel is one combination that produces a nice pattern. Damascus, or forge welded steel blades have a distinctive swirling pattern and can hold a very sharp edge. The reason blades made by this process are so sought after is the beauty of the patterns. Each blade is an individual piece. There are names for some of the more commonly achieved patterns but even those are individual in the way the light plays on the steel.
The billet is heated until it can be hammered together, either with heavy steel hammers, or by machine, with a power hammer. The patterns are made by a combination of factors:
High carbon content. There is about twice as much carbon in the steel used. The carbides make their way to the surface and form lines in the forging process. They are swirly and look like water. Cooling seals them in place.
Different layers of steel. During the forging the layers change position, making patterns of slightly different colours.
Laddering. This is a process involving cutting out some of the steel to reveal the layers, or stretching the steel over a mould with a power hammer. The layers emerge and when the steel is flattened again, patterns remain.
Etching. Acid can be used to define the the patterns in the steel.
Twisting. The layers of steel can be mixed more, and the patterns made more complicated, by twisting the steel when it is hot.
Damascus, or forge welded steel blades have good resilience because of the varying hardness of the steel layers that were put into the billet.
Here is a mechanised version:
And a quick look at how steel can be twisted, by luminaia: