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I found a unique dagger and it does more damage than any other melee weapon that i've seen.

Try not to waste dynamites, you will probably need them later for some quest.

If by any chance you decide to kill him be sure to tell magnus to wait.He just doesn't like doing evil things and will probably leave you.

It's been a long time since i played Arcanum and i was wondering what type of character do you play?Thief,warrior,mage or something different.

If your persuation skill is high enough you can persuade him to give you the key.Otherwise you are going to need to pickpicket him or kill him.