The story that made Damascus steel famous:
When King Richard the Lion-Hearted met Saladin, they compared swords. Richard tried to impress the Muslims by taking his huge broadsword and cleaving an anvil in half.
Saladin, who had a longsword of Damascus steel, simply took a silk scarf and laid it over the blade, and it fell to the ground in two halves.
There are variations on this - it was a bar of ordinary steel that Richard split, or it was a silk pillow that Saladin split.
It is worth noting that, in reality, King Richard and Saladin never actually met.