From Dungeons of Dredmor Wiki
It's a big ol' mug of Diggle Nog. If you didn't feel it before, this will fill you up with holiday cheer for sure.
Worth 310 zorkmids. B:505 S:195 B:642 S:133 B:753 S:71
It can be crafted with the following recipe:
Crafting a Diggle Nog also earns you the Diggle Nog achievement. The best way to get this achievement is to start off with the Alchemy skill, and explore until you find an Egg and a Grog. Check in vending machines too.
Drinking it has a 50% chance to turn the hero into a Diggle for 32 turns.