While Steve Rogers, aka Captain America, has had many different shields in his career as an Avenger, his darkest was actually a gift from Doctor Strange's nemesis Dormammu. But while the weapon might have been provided by the magical master of the Dark Dimension, there was nothing supernatural about the danger it posed - that came exclusively from the bladed, buzzsaw edges that took a symbolic expression of peace and protection and turned it into a vicious offensive weapon.
The change happened in Defenders volume 3, from Keith Giffen, J.M. Matteis, Kevin Maguire, Chris Sotomayor, and David Sharpe. In the five-issue series, the laws of magic have shifted, removing a limitation Dormammu's parents placed on him and his sister Umar, and allowing them to bond together and combine their power. Now mightier than gods, Umar and Dormammu slay Eternity, imprisoning Doctor Strange and Namor when the heroes attempt to stop their plans. Speculating that having two versions of Eternity might destroy the cosmic order, Umar allows Dormammu to bathe in his lifeblood alone and take his place, beginning the Age of Dormammu.
Dormammu transforms Earth-616 into a high-tech hellscape, allowing Doctor Strange and Namor to break free so they can see the horrific ways their reality has been transformed. Dormammu sends his own villainous copy of Doctor Strange to attack the heroes, who reveals that he commands a group known as the Metadaemons. These supernatural abominations are Earth's heroes, turned into unkillable minions of the demonic sorcerer. Their leader is a twisted Captain America - one who no longer believes in decency or justice, and has traded his former principles for a new costume with an inverted star and spiked belt, a white, full-face cowl, and a bladed, buzzsaw shield.
This Captain America wields his shield like the original, except this time slicing into his opponents rather than simply knocking them unconscious. Thankfully, Namor is at least able to take advantage of his attacks, using a twisted version of the X-Men's Beast as a human shield and leaving the bladed weapon stuck in his back (though the foul-mouthed Cap does get it back once Namor hurls Beast at Iceman, shattering him into pieces.) Dormammu is eventually defeated when he's tricked into setting aside Eternity's power to kill Doctor Strange in person, at which point Umar steals away his new magical might, allowing the Defenders to take him down. Professing that she has no interest in squabbling with her brother's enemies, she returns Earth-616 to normal, and Doctor Strange accepts the immediate victory, marking her down as a threat for another day.
Captain America was transformed into his metadaemon form to taunt Doctor Strange, as Dormammu took pleasure in corrupting a major symbol of heroism. This is actually something that serious magical threats tend to do whenever they get the chance, as defiling prior champions of justice helps to increase their dominion over reality.
Captain America has undergone many transformation in his adventures, but his time as a metadaemon gave him the most terrifying version of his shield ever - a spinning buzzsaw capable of lopping off limbs. The thing that sets Captain America apart from other heroes is his symbolic power - he's not the de facto leader of any group he joins because he's the most powerful, but because he's so inspirational that everyone around him believes, if only for a moment, in the values he represents. It's no wonder that a despot like Dormammu would be so driven to invert Captain America's ideals and turn his protective shield into a vicious weapon, but thanks to Doctor Strange, the Sentinel of Liberty's corruption was expunged from the timeline, and his honor restored.