The Amulet of Daylight is a magical amulet created by Merlin, which acts as both the source of power and a symbol of office for the Trollhunter. To make the amulet work, the user must say, "For the glory of Merlin, daylight is mine to command." After requiring all three Triumbric Stones, "For the doom of Gunmar, Eclipse is mine to command." 
The Amulet was said to be created by the wizard Merlin for his Trollhunters to use. It is unknown how old the amulet is or how many Trollhunters have wielded it.
Some time after trolls settled in America, the amulet fell into the possession of Kanjigar the Courageous, who would become one of the best Trollhunters. To focus on his training and serving trollkind, Kanjigar chose to distance himself from his young son Draal, who began training to become worthy of the amulet.
Kanjigar was defeated and disarmed by Bular, the son of Gunmar, under a bridge in Arcadia Oaks. To prevent the amulet from falling into Bular's hands, Kanjigar sacrificed himself by falling into the sunlight, petrifying himself and keeping the amulet out of Bular's reach.
First Human Trollhunter
On his way to school, Jim and his best friend, Tobias Domzalski, discovered Kanjigar's remains in the canal, along with the amulet, which called Jim's name. After school, Jim managed to activate the amulet, while also meeting his trainers, Blinky and AAARRRGGHH!!!
When the Amulet is activated, it grants the user the Trollhunter Armor and the Sword of Daylight. The amulet can be ripped off its wearer or knocked off by excessive force. The amulet has the ability to generate a surge of light that can blind or even petrify trolls, excepting those that are immune to sunlight. This light will not damage the Trollhunter, even if they are a troll; however, the amulet will not protect a troll from natural sunlight.
The amulet responds to its wearer's emotions, activating when the user is stressed and deactivating when the user returns to a normal emotional state. Blinky notes that the amulet's effects will differ for Jim due to his human physiology. With time, the amulet will respond to its wearer's desires as well, allowing the Trollhunter to manipulate the armor any way it desires.
The amulet will return to its user if discarded, as Jim attempted to do in Wherefore Art Thou, Trollhunter? However, if the amulet is stolen, as Gnome Chompsky managed to do in the following episode, it will not return. This caveat can be circumvented in times of mortal danger, as Jim, besieged in the woods and defending Claire, managed to call to the amulet, which escaped Stricklander's clutches in the museum and flew to its master's aid.
The amulet and its armor and sword will alter themselves to their user's proportions. When Jim first activated the armor and sword, they were set to the size of Kanjigar, its previous owner, before shrinking to fit Jim. Furthermore, if the wearer's size has been unnaturally altered, such as through a Furgolator, the amulet can change itself to match this size, which Jim used to fight Chompsky after the gnome had disarmed him.
The amulet's other abilities include translating Trollspeak to English and vice versa. Additionally, the amulet can be opened and upgraded with special stones. The specific abilities of each stone are unknown, but certain combinations of stones will result in upgrades to the armor's functionalities, including different weapons. When all 3 Triumbric Stones are placed in the amulet, it changes to a red color and the Eclipse Armor and the Sword of Eclipse become available. The amulet's faceplate can be removed and used to activate the Killahead Bridge as normal.
Should the Trollhunter fall in battle, the amulet will speak in the voice of the fallen Trollhunter, calling out to its new owner should they be nearby.
The gallery for the amulet can be viewed here.