the process is to heat to cherry red, and then dip in oil
this is the hardening process, the result of which is the piece
will be hard as hell, too hard for a tool such as a punch.
the second process is tempering, as mentioned emery or sand the tip to a bright finish, do so back about 2 inches to give you some room to play. then slowly heat back about 2 inches and watch carefully the shiney tip surface, it will start to turn a very light yellow, then full yellow, then straw color, at this point immediately drop into water
the use of water is to stop the tempering at this specific point, the temperature is likely something on the order of 400-450 degree's F
so it is not that hot and water will not hurt it, water is just faster at stopping the heat flow than oil is.
then to be on the safe side, heat the hammer end until it is full dark blue, almost black using the same process, and just let it air cool
or you can drop it in water as well, this will just about fully soften the working end so that it will mushroom rather than splinter.
of course you will be using safety glasses everytime you use this or any other tool right?
bob g