What I know about holster-making you could probably put in your pocket.
I know considerably more about knives and steel used to make knives.
A good rule of thumb is to NEVER buy a knife made of stainless steel unless you absolutely know with a high degree of certainty that the stainless alloy is acceptable. There are not many stainless alloys that are worth a rotund rodent's posterior for making edged items, believe me.
ALWAYS buy carbon steel tools and KNOW the alloy you are buying. Carbon Steel does not have to be exotic. A good 1095 is fine. D2 tool steel is better, but it is harder to get a good edge on. However once you do, it stays on there a long time. However, even these can be marginal, depending on the heat treat. A good maker will tell you what his heat treat range is (and it should never be more than a 3 digit range or pass on it). A good example of a working knife will be treated to something like 55-57 Rockwell C. D2 should be up there around 57-59 Rockwell C. Don’t go for anything harder. NEVER buy stainless. If your supplier can’t tell you the stuff I’m telling you, don’t buy the product….that simple.
Most (I would say 90%-95%) of stainless knives and virtually all stainless tool knives are made of some variety of 400-series stainless steel, usually some sub-variety of series 420. 400 series SS (sometimes impressivly called "surgical" stainless steel) is used by commercial makers because it is cheap and is easy on their tooling and they can produce more product before they have to dress their tooling or replace it. In other words, the products made from this 400 series SS are junk, I don’t care who makes it, sells it, how great it looks, how great anyone tells you it is or otherwise blows smoke up your butt about it.
If you actually DO get a good edge on 420, the edge doesn’t last long and getting a repeat of that short-lived good edge is not guaranteed. Why is that? Because the alloy is so soft that trying to sharpen it is like trying to sharpen a stick of butter.
Most Damascus steel coming into the US today is made in India or Pakistan, whether it is carbon steel or Stainless steel. It’s crude stuff. The rationale for using Damascus steel in our line of work just does not wash. It’s pretty and that’s about it. Go for something you know.
True Japanese “Damascus” is something else again. It is carbon steel and you can see the layers if you look hard (maybe with a glass), but “picture” steel is not what it’s about with them. They’ll fold the steel a jillion times, but for their true weapons and high-grade tools (chef’s knives, too!!) their thing is to encapsulate a very had steel edge inside a softer covering (you can actually see the wavy line down near the edge). So they get a hard, ultra sharp edge with the impact resistance and resiliency of a softer alloy around that. The item will bend and absorb impact without shattering or snapping off. This is an art form all by itself and is not what we need in our work. It is incredible what they do with edged weapons…. almost spiritual. Any commercial picture steel Damascus coming out of Japan should be of some quality exceeding the middle eastern stuff, but not what you want to work with, generally. If it is Stainless Steel, even from Japan; even from the US, my advice is to stay away from it.
There are some good stainless alloys, such as AUS-8A and others, but there’s really no reason in my mind to consider them. A good carbon steel blade is what you need, even for the replaceable blades in craft knives, although I’ll bet many of those are now cheap stainless. Their blades are so thin and flat, however, they can be repeatedly sharpened easier than a real knife blade.
Oh, as far as a round knife for leather work…….those things scare me and I usually follow my gut feelings about stuff like that.
EDIT:
Okay, okay, before I get too smug and carried away,
we have to face some practicalities relating to what I stated above.
Most times, the supplier is not going to be able to talk to you about alloy content and heat treat numbers related to their standard, off-the shelf products. If that is the case, I wouldn’t worry about it too much other than to say that he SHOULD be able to tell you whether an item is Stainless or carbon steel. If he can’t do that, then my advice is to look elsewhere. Also, the magnet test is not going to tell you anything. Most implement grades of stainless will react to a magnet.
What I would be careful of is if you are going to buy a higher priced knife of any kind (I’m cheap, so I draw the line at about $50 or so). Also, if it’s coming from a small producer, they should be able to talk about alloy content and heat treat. Again, my advice is to stay away from stainless.