This is all handled by the enhancements you get from the Blood Forge. Damage puts a stat directly on the item - and it applies in all contexts.
The elixir takes whatever damage you're doing and it multiplies that. Note: only the highest multiplier is ever used (so if you have an item that gives you 1.5X damage and you buy the 5X you will only get 5X and not 6.5X).
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