In Act Two you use the Cube to combine the two parts of the Horadric Staff (each part you must find at the bottom of a nasty dungeon) in the Cube, then Transmute them into a whole staff, which is later used to open the way down to the Act boss monster. You can see a shot [[Khalim|of that portion here]]. But as Cain tells you then, there are other uses to it. His speech at the time reads as follows:
<blockquote>"You have quite a treasure there in that Horadric Cube. According to the Horadric lore, the Cube can restore a Horadric Staff.<br><br>
To do it - use the Cube as you would a scroll. When the Cube opens, place both pieces of the Staff into it and use the Cube's transmute power. You'll be pleased to know that the Cube has other alchemical uses as well...<br><br>
Six gems plus one sword transmute into a socketed long sword. You may also transmute two quivers of crossbow bolts into one quiver of arrows, while two quivers of arrows yield one quiver of bolts. I must leave it to you to discover other formulae."</blockquote>