This one is simple.
Obviously, you need to use magic 10 times during your game. When you die, you automatically get one magic bottle. With three lives that is three uses right there.
I used a magic bottle right away when I saw another one laying on the ground. I also used a magic bottle when I saw the gnome-hunchback-thingies so they would both drop a potion.
Mine popped around the middle of the third stage. It was easy enough and took about 10 minutes.
Thanks to FateInfinity for the video!