Special Note: The sword's name is in all actuality Tessaiga. A translation error confusing the the kana character っ for つ erroneously added the "tsu" into the name instead of the doubling of the consonant "s" which is what the lower case っ would have done. By the time the error was discovered, Viz decided it was too late to correct and decided to stick with Tetsusaiga. That having been said, I will go back to calling it by the name most people reading this will know the sword as - Tetsusaiga.
Tetsusaiga is one of the three swords wielded by Inuyasha's father and was actually forged from one of his own fangs by the smith Totosai.
Tetsusaiga has two distinct forms. The first form is it's "rest" or "inactive" form. This is the form it's in when Inuyasha and Sesshomaru first discover it. In this state if looks like a badly abused katana. Its blade is nicked and rusty and its tsukaito (wrapping on the grip) is frayed and disintegrating. The blade itself is so dull that it can't even cut anything.
It's second, "active" form is a whole different story. When wielded in defense of humans it transforms into a gigantic crescent-shaped sword with a furry hilt. As the story progresses and Inuyasha gains experience using Tetsusaiga he's able to switch its form and activate it in a larger and larger set of circumstances as well as use more of its special abilities. It is a truly impressive and powerful weapon in this form and can even act on its own if Inuyasha loses consciousness
An object of desire for Sesshomaru, it's been the cause of conflict between the two brothers several times. The very first time they clashed over the sword was before its location was even known and their father's tomb was still concealed within the black pearl in Inuyasha's eye. Despite the fact that Tetsusaiga has an enchantment on it that prevents demons from using it, Sesshomaru seems to be intent on possessing it and resents that Inuyasha inherited the powerful sword while he inherited the non-destructive yet incredibly powerful Tensaiga.
Some of the many fabulous special powers and attacks of Tetsusaiga are:
Wind Scar (Kaze no Kizu 風の傷): A Special sweeping attack that's able to kill 100 demons in one strike
Backlash Wave (Bakuryuha 爆流破): Tetsusaiga's ultimate technique. Uses the feedback between the enemy's aura and the Wind Scar to create a feedback that magnifies the attacks power a hundred-fold.
Diamond Spear (Kongosoha 金剛槍破) A special attack Tetsusaiga gained from Hosenki that causes Tetsusaiga to glow and then fire a bunch of diamond shards when Inuyasha swings it. I imagine they aren't real diamonds or everyone who knows Inuyasha would be a billionaire after he uses it. They'd probably just sit in town and make a giant pile of diamonds. W00t for l00t!
