After the battle with Qin Shihuang in his dragon form, where he was killed, the monks from Tibet entered the Temple of Xian and placed the Dagger of Xian back into its pedestal. Somehow, after the Dagger was put back, one of the monks was killed by its magic powers. After this the monks took the Talion and hidden it deep within the Barkhang Monastery to be protected by the Guardian of the Talion.
In 1997, Lara Croft took the Talion and killed its Guardian. She then used it to open the Temple of Xian so she could recover the Dagger.