During his imprisonment, Ethel gives the ruby to his villainous son, John Dee (David Thewlis), who modifies it so that it only works for him. When Morpheus does try to reclaim it, the ruby rejects him entirely, allowing John to wield its power to wreak havoc on humanity.
John plans to use the ruby to reshape the world to his liking, but Morpheus eventually recovers in time for round two against him. John nearly overpowers the King of Dreams using its magic, but he makes one fatal flaw.
Source: https://www.distractify.com/p/where-is-the-ruby-the-sandman