When the XXXG-01D Gundam Deathscythe was captured and destroyed by OZ's forces in AC 195, the extremely durable gundanium-made remains of that mobile suit were taken to OZ's lunar base and mobile suit factory for storage. However, the five scientists who created the Gundams use the resources of OZ's lunar base to rebuild the Deathscythe under their enemy's very nose. That opportunity came when the Romefeller Foundation - the political force behind OZ - became split over a number of issues, and the "Treize Faction" of OZ attacked the lunar base, which at the time was still under the control of Romefeller loyalists. During the chaos, Duo managed to escape, taking his rebuilt XXXG-01D2 Gundam Deathscythe Hell to continue fighting on his own.

The new Deathscythe Hell was a considerable improvement over its original form, with a more powerful beam scissors (scythe), increased speed and mobility, improved hyper jammers, and an "active cloak" system which served as both a optical/visual cloaking system (making the Gundam literally invisible to an enemy's naked eye) and as an external layer of beam-deflecting armor. These improvements allowed Duo to continue his fight against both the militaristic OZ and the radical civilian "White Fang" rebels, putting the Gundam Deathscythe Hell on an almost equal footing with White Fang's newest AI-controlled mobile dolls. And, of course, its demonic appearance makes for an effective psychological weapon.

Source: Gundamproject.com, Gundam W: Endless Waltz DVD