Near Whiterun, there is a tree with the sword sticking into it. The tree is marked by a pillar of blue light. Walk up and claim the sword.
The sword can also be crafted with the elven crafting perk, IF you activate the crafting option in the MCM.
The spell granted by the sword can be controlled by the MCM. The spells differ in ability, both in type and damage. Burn is a touch spell which deals some damage over time, Bolt is a ranged spell which deals instant damage with a little over time. There is an option if no spell is wanted, primarily for people who use shields or dualwield.
The sword itself also has a vanilla fire enchantment on it as well.