All right, this is my theory on the matter (and don't worry, it's not really outlandish like some of the other things I've said, I don't think). However, it will be neccessary that I make one allusion to Tolkien as I am wont to do. Anyway, here it is.
Firstly, the red stone that is called Dreamstone. I have always taken this to be some ancient magical mineral, perhaps come from the earth itself. Now as this relates to the Masamune...Melchior knew that Lavos was a danger, and that to attempt to take power from the Demon would result in catastrophe. To that end he knew that which he and the other masters had created, the Mammon machine, must be destroyed. Now whatever strength the Mammon machine might have, I would assume only a thing of great power could destory it. Thus Melchior took what remained of the Dreamstone and forged a knife. Now in my theory, the power of the Dreamstone is such that it can, in either the spiritual or physical realm, or maybe both, create incarnations of one's thoughts and desires, at least if forged in a certain way. In this I see the stone, when forged into the knife by Melchior, not unlike Sauron's ring: into it are poured the power and strength of the one forging it. But of course the motives of Melchior are different. In his zeal to end the menace and do right, he pours into the sword his courage, knowledge, and compassion. Thus, by the power of the stone of dreams, are born the three spirits: Masa, of his might and power; Mune, of his knowledge; and lastly Doreen, of his compassion and dreams (she strikes me to inheret both). In essence the stone give physical manifestation to Melchior's will. This is then enchained within the knife. So when he give it to Crono to use against the Mammon machine, he is in some manner giving his own strength to the fight, contained within the magical sword. (for whatever reason that I cannot speculate upon, however, Doreen is absent. Perhaps the spells or whatever do not bind the will fully to the sword, but only partially. Or maybe in the destroying of the Machine she would have little part. I do not know.). Yet there is more to the matter. The stone, as I have said, forged in that certain way, takes its power from the hopes and dreams of its holder; initially in the forging this was Melchior, and so his mark is strongest on the blade. Yet other things can to a lesser degree affect it as well, I think (though not change its innate being, that is of three spirits). When Crono wields it, his own hopes are put forth into it. The knife itself is not a knife, per say, I would say. Rather what it "really" is three spirits; the blade is merely a manifestation of both mood and will of those three. Thus Crono's will augmenting theirs changes its shape, because the will has changed slightly. So it becomes the Masamune (though it always was the "Masamune"; it is merely a new incarnation based on what has been put into it. How someone has used it, to borrow the terminoligy that the two say when you meet them in the Dendorado mountains). Like this it stays for thousands of years. Doreen, perhaps purposeless in the attack on Lavos, remains absent and wandering (and maybe dreaming, as is often her wont). Finally we come to the battle with Magus. He shatters the corporeal manifestation, and damages the strength of the spell that holds the spirits, who are the Will of Melchior, to the sword. But Melchior in time reforges his creation, and it is again how it should look (this is my absolute favorite quirk in CT. At the beginning of the game, he knows EXACTLY who you are at the fair, having seen you on the mountain later; but on the mountain, all is reversed.). Anyway, battles come and go, and we come to Porre (I would expect its potency against Magus is merely legend; it is, after all, the greatest sword in Chrono legend). Whoever takes it, I will not guess, uses it. Now as Masa and Mune so aptly said, it is not WHO wields it, but HOW. Because the strength of the sword is based on will. The original design of Melchior cannot be broken, but it can be corrupted. Whoever wields it uses it evilly, and has a will of darkness; this is poured into the sword, and due to its nature (which I have already thoerorized on), being a manifestation of the will, changes into the crooked blade we see in CC (I believe it being red is merely a coincidence, red being the color of blood and war). So great was whatever will guided it that unless someone of great will held it thereafter, the effect of the sword would work in reverse; rather than the will being made manifest in the blade, the darkness would lay hold of and ensnare whoever held it. Radius fell prey to this, because he had not the strength to shape it to his own will. It could not fully control him, but it echoed darkness in his heart. But when the Masamune is beaten by Serge, the evil will that had laid hold on them and dominated their being was shattered; Serge's will replaced it, though perhaps Riddle had a little to do with it. Then awoke Doreen, appalled at the darkness the two had lived in (she, likely, was banished from the blade, or weakened may be better; she, being of compassion, would have no place in the dark plans of whatever master held it. Without a will being placed into her, her power was weakened severely though, as said, being still innately born of Melchior's will she could not be fully destroyed without utterly annhilating the blade; she, and the other two ARE the blade). She chides her brothers, and as Serge, a seemingly compassionate soul, holds the sword then, her power is returned anew. In fact, I would wager it is greater than the other two; in my opinion only, I think he is more compassionate than he is knowledgeable or strong. Now, it is not fully who wields the blade, but how they use it (to quote the twain again); yet even so I think the desire and the will is what shape it, rather than true events. It is a sword based on the force of will (which, I think, shapes intended actions, and thus "how someone uses it; an evil person will use it for evil, and good for good). This effectively ends what I wanted to say on the Masamune.
Not much on the Einlanzer though. I think this to be the equivalent of the Masamune, and so in all respects similar; it is akin, I think, in the way that Terra Tower and Chronopolis are. At some point the victorious Reptites, even as the humans do in their time stream, forge a sword out of dreamstone. Whatever dreams of the smith there are are never fully explained; perhaps they are as unknowable as a Dragonian mind is to a human. But whatever may be, it has the power to circumvent the evil will of the Masamune, because whatever will holds it is stronger. Perhaps it was better forged, because even though it rests aside resentful Dario it is not darkened. Also, whatever spirits rest in it do not make themselves manifest, or perhaps are incapable of doing so to human eyes. It is thus not as potent a weapon as the Masamune in human hands, but would be equivalent in Dragonian. That is about all I can say on the Einlanzer.
Anyway...what do you think of my thoery? I think it fits nicely, personally.