Since the Summer 2008 update this dagger shows a physical attack value of 16 plus an additional +2 in earth damage when you look at it. It still does the same poison damage as described below though.
Since the Winter 2007 update, this dagger causes poison damage, which does 1 damage each turn and lasts approximately 1 turn for every 10 damage done to the creature. The harder the hit, the longer the creature is poisoned. A few of those still remain in Rookgaard on a few worlds since they were once a Minotaur loot.