To upgrade your tools, you will need to speak to Clint, the Blacksmith who runs a Smithy on the east side of town, just above the Library. To upgrade your tools, you will need to have five bars of the metal you wish to use for the upgrade, and this will also cost a fee to upgrade each time. When you upgrade your tools, you will be unable to access them for two days. You can also upgrade your Trash Can so that you get a percentage of the value for all discarded items.