After reaching level 15 a new option will appear in the forbidden forest, search for voldemort's lair. When you do so you will find lord voldemort, a very powerful foe though you are given the opportunity to flee before committing yourself but if you choose this option you will be unable to face voldemort for the remainder of the day. It is reccommended to have all your specialty uses, full hit points and any other perks you may have such as mounts or pets before attempting voldemort.
If you defeat voldemort in combat, you restart the game at level 1, with a few extras. You are allowed to choose your race and specialty again and no gold is carried over. Things that are carried over are pets, phoenixes (assuming you have a high enough good morality to keep it, you will learn what morality you need to keep it next time in the text) any additional maximum hitpoints you received, a hat(somewhat reduced), charm, gems, and merit points from the order of the phoenix. You also have an additional point you can choose to spend in extra forest fights, extra attack, extra defense or 5 extra maximum hitpoints. You will additionally gain five charm points. These will carry on VE through VE though there is a way to change them. VEs also give you new titles, occasionally new weapon names, and other abilities such acess to new places or the ability to buy mroe advanced mounts