The History of the Dark Magician :

Long ago, when the Pyramids were still young, there lived a great ruler over the land of Egypt. The Pharoh's name was Yami, and like all great rulers, he had a "right hand man." This powerful sourcerer wielded one of the Seven Millenium Items-The Millenium Ring. His name was Mahaad. Some sort of thief desired the Millenium Ring, so they held a shadow duel for it. Mahaad Played his favorite monster, The Dark Magician. However, the Thief Played a stronger Monster, Mstical Knight of Jackal. It destroyed Dark Magician, and the rest Mahaad's Life Points. I think you know what happens when you loose a shadow duel. Well, being the sourcerer that he is, he intead trapped himself inside The Dark Magician Stone. Yami eventually found out and uses that card to help him defend Egypt for the rest of his "life." The Thief walked away with the Millenium Ring. Even to Modern Day, Yugi Holds the dark Magician with Mahaad's Spirit. If you notice the smirk on Dark Magician's face when Yugi plays certain Cards such as Magical Hats. And then, let's not forget Yugi's Duel with Arkena. Dark Magician Sacraficed Himself to save Yugi. Mahaad Protects Yami yet again.

Sourced from the Yu-Gi-Oh! Manga