Quote:
The damage of a hand-to-hand weapon is added to a character's natural hand-to-hand damage. A character's natural hand-to-hand damage is calculated by multiplying hand-to-hand skill by 0.11 and then adding 3. When calculating the Weapon Rank, however, the number used as the weapon base damage is the number displayed on the weapon plus 3, with no contribution from hand-to-hand skill.
This is some information on H2H. Simply put:
(Skill (including gear) * 0.11) + 3.
If you can't break the next tier of DMG, then focus on ATT.