After defeating Sephiroth in Radiant Garden, Sora witnesses a battle between Cloud, Sephiroth, and Tifa. After Sephiroth and Cloud fly away into a duel, Tifa thanks Sora for his help and gives him the Fenrir Keychain.
The Fenrir is also one of the types of Keyblades left at the Keyblade Graveyard.
The Fenrir Keyblade, unlike all other Keyblades, takes on the appearance of a pin tumbler lock key, with bandages adorning the base of the blade similar to Cloud's buster sword.
Its Keychain resembles Cloud's Fenrir pendant from his Advent Children outfit. The cylindrical protrusions at the base of the blade resemble those of Cloud's Ultima Weapon from Final Fantasy VII.
Fenrir is named after the motorcycle ridden by Cloud in Final Fantasy VII Advent Children, which also appears as a special Gummi Ship. The motorcycle is in turn named after Fenrir, a wolf summon which has appeared in multiple Final Fantasy games, in keeping with Cloud's wolf-motif.
Despite the passive ability of Negative Combo, Fenrir makes up for it with its high attack power, a strength boost of +7. It is also the strongest Keyblade available; its strength even surpassing that of Ultima Weapon.
Fenrir is the only piece of equipment with the Negative Combo innate ability, and if used with Sora's learned Negative Combo equipped and with all Combo Plus and Air Combo Plus abilities unequipped, Sora will use combo finishers exclusively.
This makes it essential for high scores in mini-games like Junk Sweep, Cargo Climb, and Phil's Training, which focus on the use of combo finishers. Furthermore, as bosses in Kingdom Hearts II cannot be defeated unless a combo finisher is successfully performed on them, the Fenrir is quite useful against bosses who tend to interrupt Sora's combos.
Fenrir is the shortened name of the Norse wolf-god Fenrisulfr. The bandages around the Keyblade represents his feat to the gods. Fenrir was claimed too powerful, and he asked for his strength to be tested by certain bonds wrapped around him. He would break all except for one.