Keychain

A Keychain (キーホルダー) is a magical piece of equipment that modifies the appearance and abilities of a Keyblade. In Kingdom Hearts 358/2 Days, the Gear Panel function replaces Keychains. Likewise, the Card system replaces Keychains in Kingdom Hearts: Chain of Memories. Cards, however, do not affect appearance, only ability.

Power
The Keychains have the ability to change a Keyblade's stats, grant it special abilities, and give it a new appearance. While most Keyblades have a basic form, like the Kingdom Key, a Keyblade wielder can upgrade and change the form of the Keyblade with a Keychain. In other words, when Sora or another wielder is equipping a "new" Keyblade, he or she is equipping a different Keychain to the Keyblade, changing its form.

Origin
It has not yet been explained exactly what a Keychain is and why it has the power to transform the Keyblade. A wielder usually receives a Keychain after "completing" the events that transpire within a world, but the Keyblade wielder can also receive the Keychain from some people, like when Tifa hands Sora the Fenrir Keychain after defeating Sephiroth. These Keychains are often modeled after elements of the world from which they are received in some way.

Exceptions
Sometimes, a Keyblade does not possess a Keychain. One example of this is the Keyblade of People's Hearts, the Keyblade created by gathering seven hearts of pure light. The Keyblades Ends of the Earth, Wayward Wind and Stormfall did not posses Keychains in the Kingdom Hearts II secret video Birth by Sleep. The broken Keyblades from the Keyblade Graveyard do not possess Keychains either. The actual reason for the lack of a Keychain is unknown.