The Cape is an accessory purchasable from certain shops. It can also be found in Crates on a semi-rare basis and is also dropped by Vampires upon death.
Capes bought in shops cost $10800 plus a level inflation of $1200, making them one of the most expensive items in the game.
The cape is essentially a re-usable, manual Parachute. Pressing the jump key in mid-air will cause the cape to fan out, slowing your fall speed. You can press the jump key again to resume falling normally.
It works great when used with Spring Shoes and Climbing Gloves, but is made mostly obsolete by the Jetpack.
The cape prevents fall damage and gives you quite a bit more air control. The cape also lets you slowly glide onto spikes without dying (unlike the jetpack), yet still does stomp damage to an enemy if you glide down on top of them.
It also has unlimited air-time duration, unlike the jetpack which can run out of fuel in mid-air.
While slowing your fall with the cape, you can throw ropes upwards and climb up them without having to touch the ground, which can save you in the Ice Caves if you fall down the pit at the bottom of the level.
You cannot equip a cape and a jetpack at the same time, picking either up drops the other you were wearing.
Its appearance and functionality resemble the cape from Super Mario World.