For a long time Dwarves have been known across the lands for their skills with the metals and their ability to turn a raw piece of ore into a beautiful piece of jewelry or armor.
Most of those skills are long forgotten, but some skilled craftsmen still keep some of their knowledge.
If you are lucky, and one of this craftsmen ever asks a favor of you, maybe you could ask him to give you a tip or two about jewel enhancing.
The Dwarven quest giver is an old goldsmith, currently residing in Vesper. Help him and you will be granted access to the forgotten knowledge of the Dwarven jewel enhancing techniques. He requires a bag of 100 or so GOLD and Diamond Bracelets to be dropped on his head, remember to make them with GOLD ingots or you'll lose a wad of diamonds.
With the Dwarven Jewel Enhancing Toolkit, found at any jeweler's shop, you will be able to craft the Jewel Enhancing Kits as well as the Iron Strands.
The kits will allow any person to enhance a piece of jewelry, as if the dwarf himself were doing it (no fail to enhance).
The kits are delicate pieces of craftsmanship, and require great skill, much knowledge and some materials to craft (fail consumes materials).
Besides the 50 gems needed to enhance a jewel, a large amount of iron will be required as well, as the mechanism of a kit is extremely complex, and require the most pure iron.