Complex sentence: He tells Henry if he closes his eyes, he'll believe he's holding a real sword, and the stick indeed becomes a real sword, which he uses in cutting down his opponent's stick and slashes him across the face.
Split into simpler sentences: He tells Henry if he closes his eyes and believes he's holding a real sword, the stick will become a real sword, which it does. Henry uses it in cutting down his opponent's stick and slashes him across the face.