Shed Proto-Dragon Claw

Shed Proto-Dragon Claw is a quest item that can only be picked up while on the corresponding quests. It can also be used to give your dungeon party Heroic Proclamation, a ten second buff that increases haste and damage dealing by 30%.

Source
This item is picked up in front of the gate in the Blackrock Stadium, where Commander Tharbek is fought in Upper Blackrock Spire.

As a quest objective

 * Damsels and Dragons
 * A Hero's Quest is Never Complete