Devil's Necklace

The Necklace is an object used by The Devil to prevent the real Jesse Ridgway from escaping the Mirror Realm so that he could impersonate him.

Origins of the Necklace
The necklace was created in Hell, Thus, it can only be destroyed in the same fire in which it was born, and inside, contains the soul of a great pure evil beast that manifests through someone's body if they ever wear it.

Psycho Dad's Return
After he was shot and killed by Jesse, The Devil's soul enters the Necklace and he talks to Jesse through it and tries to get him to snap into Isaac. When that failed The Devil successfully got Jeff Sr. to wear it, turning him into Psycho Dad.

Psycho Dad's Attempted Banishment
After finishing My Virtual Escape in Hawaii, Jesse finds out Jeff was wearing the necklace and rips the the necklace off from around his neck and throws it into the ocean, but the necklace is later revealed to have after effects as it causes Jeff to become angry all the time and become one of the main antagonists of the third season of The Devil Inside Series.

Isaac's Involvement and Season 3
When Jesse later has a talk with Isaac Kalder in the mirror realm it is revealed that Isaac somehow found the necklace. Jesse refuses to take the necklace back and lets Isaac keep it. When Jesse goes on a trip with his friends he finds the necklace on the ground revealing that The Devil Inside is not over. He later puts it on confusing viewers and Other Characters on whether he's the Devil or not. He said he is embracing the darkness and the devil writes for and with Jesse.

The Devil's Party
Towards the end of Jesse's housewarming party video, it was revealed that the Jesse we'd been seeing was actually The Devil himself, possessing Jesse's body once again. Even though Jesse said that he was using the necklace to embrace the darkness and that The Devil writes for him, it is likely that either this is a lie told by The Devil or, even more likely, The Devil double-crossed Jesse and trapped him in the Mirror Realm once again.

Casted Aside
In the devil aside. Jesse finally regains control of his body and confronts the Devil trapped inside the necklace, and finally throwing away the necklace into a cornfield, imprisoning The Devil inside the mirror.

The Halloween Party and Destruction
Before a Halloween party, Jesse got the necklace back and starts acting like the Devil again. At first, he was hesitant to give it up, but Brian Spitz and the party guests managed to snap him out of it and convince him to throw the necklace into a fire. This allegedly led to the Devil’s death, ending his reign of terror forever.

Trivia

 * It is possible that there are multiple necklaces, since we also see Domenic Maisto wearing a necklace in his videos, which are considered canon.
 * The Necklace is the main plot of the third season of The Devil Inside Series.
 * The necklace Jesse used for his Devil Inside series can be found here.