Dorgencalibur is the best sword for Jaster, yes, but....
It's only obtained by beating the game, then beating the bonus dungeon that opens up after the game. (You do not have to beat the extreme version, though.) Anyway. The sword you get is the Dorgenedge, I believe. The first form. You get it to MAX with 15 fights, then fuse it with a pretty high-level sword, and you get its second form. Then for the third form, and lastly the fourth form - Dorgencalibur, with 500 Attack Power.
Bear in mind that you have to clear the entire game before you can do this. Also bear in mind that, for plot reasons, you cannot use it in a rematch with the Final Boss.
Prior to beating the game, the best swords are the Seven-Star Swords, in their fourth forms. Earthshaker and Guard Axis (ultimate forms of Desert Seeker and Ixion, respectively) are tied for the second-strongest sword in the main game (only 5 points weaker than the best), and have the advantage of burning (Earthshaker) or shock (Guard Axis) as an added effect.
For raw attack power, the Gryphon Lord (max form of Pegasus Lord) is five points stronger than those two swords. I forget what, if any, status effect it may add.
Earthshaker is the easiest Seven-Star Sword to get to its max form, as its has lower fusion requirements than any of the others. Presumably because of how early you GET it. But I'm told you can upgrade it to max as early as Chapter 8 (prior to that, you simply don't get a fusion weapon strong enough for the last upgrade).
And yet, again, for plot reasons you cannot use these swords against the final boss. You must use the Plot Sword I Will Not Tell You About, that you get shortly before beating the game. (I WILL say that it can be upgraded like the other special swords, and its best form is better than SOME of the Seven-Stars. But weaker than most of them.)
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For EVERYONE else's weapons (and for Jaster's guns), fuse your way until your weapon is Lv48, with 314 Attack Power. That's the best normal weapon. (Even the best normal sword, although the Absolution Halo EX is weaker than all the special swords except two.)
"As the good archmage often admonishes me, I ought not to let my mind wander, as it's too small to go off by itself." -Danilo Thann
The Dorgencalibur is the best. Just beat the first of the 2 post-game dungeons to get it and upgrade it 4 times to get it to 500 attack power. The second strongest caps out at I think 420 or so and you get this part-way through the fist post-game dungeons. Zeo Sychros is the best main-game weapon. You get it in ch13 and its attack power is just shy of 400, I believe. Next are the 7-star swords (the best has 280 or so attack power).