It was created by Mondain and Minax when they created Exodus, and in Ultima III it may have been a part of the machine the Stranger's party had to destroy. The Dark Core wasn't seen again until Ultima VII when the Isle of Fire resurfaced. Erethian was studying it to gain its power, but the core was trying to re-attach itself to Exodus' psyche, which had been bound to a gargoyle shrine. After Erethian sacrificed himself in a final attempt to protect it, the Avatar transported the core into the Ethereal Void with the Talisman of Infinity, breaking its power once and for all.
The Dark Core also served as the inspiration for A New Breed of Dragon's interactive fiction Ultima: The Dark Core