Donald uses staffs for weapons in this game, and as this might suggest, Donald consumes MP to use magic attacks on enemies. The staffs aren't only used for magic however, they can also be used as a physical weapon, which is how Donald uses them when he needs to recover MP.
Donald doesn't have much Strength though, so make sure he keeps using spells and, when he is low on MP, you should use abilities and distractions to get his MP recovered quickly.
Donald's first weapon is the Mage's Staff, which is obtained the moment he becomes a member of the party. It is equipped to him when you first mee him, but for obtaining the other staffs, click the respective links to their pages seen below.
Related ThreadsDonald and Goofy's weapons *spoilers* - last post by @ Apr 13, 2006
[ HELP ] donald and goofy (weapons) - last post by @ Aug 16, 2003
Donald and Goofy's enemy weapons? *Spoiler maybe?* - last post by @ Apr 14, 2006
Favorite Weapon - last post by @ Jan 30, 2005
Sora, Donald, & Goofy's Weapon - last post by @ Dec 29, 2002