From Dark and Darker Wiki
Further clarification from Sur, the added damage is applied to the dps, not the actual ticks. The actual dps is split into .1s ticks. So 12 dps equates to 1.2 per tick. This can be observed when shooting a dummy, because the ticks show up as 1. This means that RoD actually scales rather slowly, with it taking 20 dps to get 2 per tick, 30 for 3, and so on. Another thing to note is that true magic damage does not get increased by your magic power. So while you can stack true magic rather high, at higher magic power bonuses additional magic will scale better. So high will builds like add magic, while high knowledge builds like true.