We explore the possibility that the steepening observed shortward of 1000 Å in the energy distribution of quasars may result from absorption by dust, being either intrinsic to the quasar environment or intergalactic. We find that a dust extinction curve consisting of nanodiamonds, composed of terrestrial cubic diamonds or with surface impurities as found in carbonaceous chondrite meteorites, such as Allende, is successful in reproducing the sharp break observed. The intergalactic dust model is partially successful in explaining the shape of the composite energy distribution but must be discarded in the end, as the amount of crystalline dust required is unreasonable and would imply an improbable fine-tuning among the dust formation processes. The alternative intrinsic dust model requires a mixture of both cubic diamonds and Allende nanodiamonds and provides a better fit of the UV break. The gas column densities implied are of the order 1020 cm-2, assuming solar metallicity for carbon and full depletion of carbon into dust. The absorption only occurs in the ultraviolet and is totally negligible in the visible. The minimum dust mass required is of the order ~0.003r2pc Msolar, where rpc is the distance in parsecs between the dust screen and the continuum source. The intrinsic dust model reproduces the flux rise observed around 660 Å in key quasar spectra quite well. We present indirect evidence of a shallow continuum break near 670 Å (18.5 eV), which would be intrinsic to the quasar continuum.