The Dagger skill is the combat skill that determines damage inflicted when striking with any of the knife-type weapons. This skill also determines the chance to hit when throwing a knife at a target. Tossing a knife that is not balanced for throwing is rarely effective.
Knives are a standard item that most characters will have on-hand at all times, as they are needed for a wide range of important tasks and crafts. They can be used in one hand effectively, but they have little use in melee outside of stealth situations.
The Dagger skill can be difficult to train, given the problems of getting close enough to an opponent to practice. Using knives on unconscious enemies or animals in traps can be helpful. Repeatedly throwing knives against the wall of your cabin may also help increase your Dagger rating.