Custom 404 page in a theme doesn't work as expected,
Do what @jdu said and check the theme's template files for an error page template.  It will probably have the name page--error.tpl.php and probably be in /sites/all/themes/md_magnum/templates/ 

After that set your new error page URL in admin/config/site-information to the node you created.

To verify it is set you can check in your database under the variables table for site_404 to be set to that URL.

Make sure after you make these changes you clear cache completely and refresh your page.  If you are in Chrome, you may have to clear browser cache as well if you are using the same URL.