How do magic items work exactly?

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I am referring to how:

Let's say I have a heroic Iron Armbands of power. How do I upgrade it to paragon when I am at the level? Do I have to find a whole new one?

How do enhancements work? Kind of the same thing, if I have a +1 weapon, can I upgrade it to +2 somehow or do I have to find a whole new one?

The reason I ask is that my DM is EXTREMELY stingy when it comes to magic items. He let's us choose which we want, but we have only gotten a +1 weapon for levels 1-7.
Generally, yes, you find new equipment to find the older outdated versions of your equipment as you rise in levels. You can also use the Enchant Item ritual to raise an item to a higher version, but this isn't particularly cost effective and is only really efficacious if you have a feat that allows you to create items above your level.
Well, that sucks. I feel like I am going to be item starved forever if I have to keep replacing my armbands of power/siberys shard/frost sword/gloves of ice/armor.
I'm gonna tell you something... this game doesn't revolve around the DM giving out magic stuff like candy (since this is the internet; I'm not saying this in a rude tone like it could be mistaken for). In fact I'm in a campaign where I just hit level 4 and I just found my first magical item... Its a potion... The game doesn't require the DM to throw things at you like that constantly. But back to your question yes there are rituals in which you could disenchant the item and use the residuum to enchant the magic items further.

Edit: Noticed a stupid typo. 

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Well, that sucks. I feel like I am going to be item starved forever if I have to keep replacing my armbands of power/siberys shard/frost sword/gloves of ice/armor.



and you get that from an "EXTREMELY stingy" DM ?
Well, that sucks. I feel like I am going to be item starved forever if I have to keep replacing my armbands of power/siberys shard/frost sword/gloves of ice/armor.



and you get that from an "EXTREMELY stingy" DM ?

Yeah, this doesn't sound like an EXTREMELY stingy DM if you are 7th level and you have five magic items.  I don't know all the circumstances, but think about this:

The standard parcel system recommends that a five-man party get four magic items each level.  They will be a party level +1 item, +2, +3 and +4 items.  So a party of third level, for example, would get a 4th level item, a 5th level item, a 6th level item and a 7th level item.

And given that enhancement bonuses are +1 for item levels 1-5 and +2 for item levels 6-10, you can do the math and decide for yourself whether you think he's being stingy.

You may only have a +1 weapon at level 7, and that's not optimal, but that's the way the cookie crumbles sometimes.  But at level 7, someone in the party has the potential to get a +3 item of some sort, so if he's using the parcel system that might happen.  At least some of the folks in the party probably should have +2 weapons/implements at this point though and if no one has one, I can see how that can be a problem.  In this case, just ask the DM if he can't see his way to give you some weapon upgrades, because you really should keep up to date as far as appropriate enhancement bonus levels go for at least weapon, armor and neck slot items.

Also, unless your DM is just picking appropriate magic items of whatever level he feels like, your DM may not be using the parcel system but instead be using the random tables in the DM's Book.  Those tables break down to give you the same number and levels of magic items that the parcel system does, only they're random and swingy, so you almost certainly won't get exactly what the parcel system indicates.

Personally, as a DM, I like using the parcel system and making sure everyone in the party gets a roughly even number of levels of magic items each tier.  I prefer to let the players pick their own items of a given level or lower, but sometimes they want me to pick for them, and in that case I'll do that but always give them the option of trading it out for something else if they don't like what I picked.  I like giving players magic items that they will find useful and fun and we don't have any problem justifying it in terms of role-playing.

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I'm gonna tell you something... this game doesn't revolve around the DM giving out magic stuff like candy (since this is the internet; I'm not saying this in a rude tone like it could be mistaken for). In fact I'm in a campaign where I just hit level 4 and I just found my first magical item... Its a potion... The game doesn't require the DM to throw things at you like that constantly. But back to your question yes there are rituals in which you could disenchant the item and use the residuum to enchant the magic items further.

Edit: Noticed a stupid typo. 



Sorry, but the game does require it.  To illustrate:

At level 1, you had +X to hit.  Monsters had defenses of Y.

Now, let's say you pay the "feat taxes" and picked up an Expertise feat.  Maybe a superior implement feat (if you're using implements), or a superior weapon that bumped you to a +3 proficiency bonus.

At level 4, you're now at +X+4 to hit (+2 for those feats, +2 for even levels).  And monsters are at Y+3 to defenses.  Great!  You've moved up in likelihood to hit them!

At level 8, you're now at +X+7 to hit (you've gained 2 points in your primary ability and another 2 for even levels).  And the monsters are now at Y+7.  So you're down to where you were originally.  Not so great, but not terrible, right?

At level 12, you're at +X+10 (levels and expertise upgrading).  And the monsters are at Y+11.  Your accuracy has dropped 5%.

At level 16, you're at +X+13 (levels and ability score).  And the monsters are at Y+15.  Down another 5.

At level 20, you're at +X+15 (levels).  And the monsters are at Y+19.  You're down 20% from your initial to hit.

At level 24  you've actually picked up +4 (2 levels, 1 ability, 1 expertise).  +X+19, Y+23.

At level 28, +X+22 (levels and ability), Y+27.

At level 30, +X+23, Y+29.  You hit 30% more rarely than you did originally.

Not coincidentally, there's now a +6 difference.  The number varies as you meander through various bonuses, but all of this holds more or less true.  That's because the designers built in an assumption that everyone was going to get those weapons.  If you don't, you'll suffer mightily.

Note that the same math holds true for defenses.  Masterwork armor has the "expertise" bonuses built in, and heavy armor has additional bonuses which presume you would've had stat increases for DEX or INT.  Non-Armor Defenses also do the same thing, and you'll keep up as long as you have Improved Defenses.

The bottom line is that everyone should either play with: a) a DM who hands out the magic items the designers expected, or b) Inherent Bonuses, which bake in the +x numbers into your character as you advance.  It's perfectly fine to use Inherent Bonuses.  But doing one or the other is expected by the designers, and not doing so will mean that your party falls behind the monsters as you advance in level.

Now, once you have items, there's the possibility to of using the Enchant Magic Item ritual with residuum to upgrade items (the rules only call for the 5 level items- neck, armor, and weapon/implement- but you should be able to extend it to other things).  It's expensive because of the expected gold levels (you're really expected to be buying stuff below below your level), but it's useful for certain things, especially when you are upgrading an off-hand weapon or implement.
That's only true if the DM makes it true.  It's entirely possible to scale encounters such that low optimization and/or low magic won't break the game's expectations.

Personally, I'm a fan of just using Inherent Bonuses to take care of most of the scaling and upgrading.
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