When you get to Hendon Myre you will come across a little scientist named "Loton".
When you talk to Loton you'll see above his head a blue symbol, enter into that menu and you should have entered his "Reinforcer/Disassembler Shop".
From there simply find a weapon or armor of yours and you'll be given the option to disassemble the item.
Once you disassemble the item you'll earn the achievement.
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