How do you use items during combat ?
 

there are several items with a 'use' options such as the silver chain that gives hypnotists strongly suggest they are to be used during combat. How do you use them? I see no option during combat to use them...

I think you can't use item during combat. You are suppose to use it outside. The hypnosis thing you mention is the one that give the scroll if you fought and won the keeper if i am not mistaken.