After the events revolving around Mildew's fake Hideous Zippleback prints, Hiccup and the other Dragon Riders created D.U.M.B (Dragon United Monitoring Brigade) in an attempt to watch over the dragons and prevent them from causing any more "havoc." While Snotlout was arguing with Gobber, Hookfang wandered off for a few hours. Realizing this, Mildew seized his chance and used this stick to slash several pillars, walls, and tapestries in the Great Hall to make the villagers believe that Hookfang had vandalized the Great Hall. While Hiccup noticed that their were no scorch marks in the Great Hall, a clear sign of a Nightmare on a rampage, no one else was aware of this one particular fact and proceeded to blame the dragon for the destruction done.
Later, after Mildew's meddling caused the dragons to be banished from Berk, Hiccup discovered the stick and two Zippleback Boots behind a curtain in Mildew's House while he was fixing Mildew's damaged roof. However, Mildew and Fungus returned before Hiccup could take the evidence and disposed of the two items by throwing them into the ocean.
While not directly mentioned in the episode, Hiccup does bring up that the two items, including the claw stick, have been thrown into the ocean whilst he and the other riders are combing the beach for them. They are also indirectly mentioned when Hiccup tells Stoick about the two items, which he requests to go see. Once Hiccup tells him that Mildew threw them into the ocean, Stoick claims that Hiccup would require more evidence to accuse Mildew of high treason.
The top of this stick has claws that match the size and shape of those of a Monstrous Nightmare. Mildew used this stick to create false Monstrous Nightmare claw marks and to frame Hookfang for vandalizing the Great Hall.