Damascus Steel is a metal that is steeped in history. Originally made from Wootz Steel in the Near East, the techniques that were traditionally used to forge Damascus Steel have been lost since around 1700 C.E. Original Damascus Steel is a marvel of production. Featuring nanowires and carbon nanotubes it is still a mystery how they created these structures without modern technology.
Now, I know words can be boring, so if you don't want to keep reading there's a good explanation in the first half of the video attached above. To paraphrase the boys at Vegas Forge, Damascus Steel in the most basic explanation is made by welding sheets of really thin steel inside a box. The steel box is then put into the forge, so the sheets can be forged together.
Once the box is removed from the forge, it falls away leaving a brick of half-finished Damascus Steel. The steel brick is then placed back in the forge. After heating, the brick can be hammered into a rod (the perfect shape for making rings). This rod is then twisted which is what creates that amazing twist pattern. The final step is the outer layer is shaved off leaving it as a smooth perfect cylinder.