A dagger is a knife with a short blade commonly made of iron or steel.
Daggers have much shorter blades then swords, making them easy to conceal, and therefore became a weapon of choice for assassins and spies of the East India Trading Company. Pirates also used daggers; Bootstrap Bill Turner gave his dagger to his son, Will Turner, onboard the Flying Dutchman.
For a pirate, their small knife was also a tool, but this weapon was indespensible when their gun was empty or they were in close quater combat. It has the advantage of being both a melee weapon and a long ranged weapon, as they can be thrown.
Buccaneers were known to have used at least two long knives for the 'sport' of running after boars and chopping them down with their knives. Shorter than a cutlass, but longer than an average dagger, it could also be used as a weapon. A brass knife would be used on a ship, as the blade would stay sharp and not rot or rust with the water of the sea. Brass knives were usually short and sharp for cutting and stabbing (and were sometimes used to clean teeth by pirates on a ship).
Well-balanced daggers can be used as throwing weapons.
Behind the scenes
In Pirates of the Caribbean Online the dagger is one of the available weapon types; there are 7 types of Daggers: three for fighting (the "simple" Dagger, the Battle Dirk (a well-balanced long knife) and the Main Gauche (a fancy blade that is useful for keeping opponents off guard) and four for throwing (the "simple" Throwing Knife, the Venom Dagger (a throwing knife coated with snake venom), the Sidewinder (A large curved throwing knife) and the Viper Brace (A brace of special throwing knives meant to be thrown in a set).