First it will act like a statue, so Link won't know it is a mini-boss. When Link comes close to the door on the other end of the room, Darkhammer will destroy the other statue and the doors will be locked.
The boss itself can be pretty hard, especially the first time. Darkhammer will swing his giant Ball and Chain while walking towards Link. When he has swung his Ball and Chain enough times, he will throw it at Link. When he manages to come close enough to Link while swinging his Ball and Chain, Link will get hurt as well. Link will see that the ceiling of the corridor is a target table, hence, Link can use his Clawshot on the ceiling behind him, causing Darkhammer to turn around and throw his Ball and Chain at him. This is easily avoidable by just walking out of the way. Darkhammer will stand there for a few seconds being all tired before pulling back his ball. This is Link's chance to walk towards him and slash away on his tail. This is pretty much all Link needs to do, and can do. Link can also use his Bow at his tail if he is afraid to walk to him, but it will cost a lot of Arrows.
The dungeon item Link acquires after defeating this boss is the Ball and Chain itself, which is the only part of Darkhammer that doesn't explode after he is defeated.