Upgrading weapons , armors and shields is possible when the items have empty sockets and you are in possession of unsealed runes. You may also find some Special Weapons that are upgraded with specific feats such as defeating a boss in a particular manner or completing quests.
Runes are obtained by exploration and as a reward for defeating strong enemies. You will need to locate a crafter who can "break" sealed runes for you, revealing the usable item.
In the breaking process, you will have the option to "bet" experience points to increase the chances that you obtain a higher level rune.
Of important note: