The Eye of Dalaran is a device that was created by the mages of the human nation of Dalaran to focus their magics in an effort to reconstruct the Violet Citadel that was razed during the Second War. The elder shaman Ner'zhul, warchief of the Horde of Draenor, ordered his minion Teron Gorefiend to invade the city of Dalaran, steal the Eye and return it to Draenor. Ner'zhul desired this artifact to focus the dark powers of the underworld for the creation of his portals.
Teron Gorefiend traveled to the stronghold of Dalaran at Cross Island, where the mages had built heavy fortifications. He destroyed the shoreline defenses, then he and his death knights broke into the Arcane Vault of the Violet Citadel, and stole the Eye. They killed Sathera and escaped atop the back of Deathwing and some of his black dragons. The Eye was delivered to Ner'zhul, and used to open the rifts.
Khadgar retrieved the Eye once Ner'zhul had opened the rifts, and he gave it to a Wildhammer dwarf under Kurdran, along with the Skull of Gul'dan. The dwarf was ordered to return the artifacts to the safety of Azeroth.
The Eye's current fate is unknown.