Silver dagger refers to either a member of the mercenary band created during the Civil Wars of the 800s, or to their special daggers, made of dwarven silver.
The Silver Daggers began as a mercenary warband under Caradoc, during the Civil Wars of the 800s. As mercenaries, they were primarily made up of riders who had dishonored themsevles before their lord but, lacking other skills, functioned as mercenaries. Under Caradoc's leadership, the Silver Daggers rose to prominence, and helped to put the young High King, Maryn, on the throne. Maddyn subsequently banned all mercenary warbands from operating, perceiving them as a danger to the throne. In deference to Caradoc's help, however, the silver daggers were allowed to function, so long as they did not gather in numbers.
By the 1060s, the silver daggers were an amalgamation of men, primarily dishonored riders and petty criminals. In order to become a silver dagger, one needed to be sworn to the band by an existing member, and acquire one of the trademark daggers from one of the smiths willing to work with dishonored men. Being a silver dagger was a form of honor; while riders with warbands, and even the common peasantry, would look down on them, they were professional warriors whose services were in demand. Frequently, they would help to fulfill a lord's military obligation, either because the lord lacked sufficient riders to meet demand, or did not wish to send all of his riders. Silver daggers refer to their life as "the long road", as they are seldom able to settle down for more than a winter.
The daggers themselves were the creation of Otho, at the request of Caradoc. The daggers are quite distinctive, being of a metal with the appearance of silver, but many of the properties of steel; some warriors, such as Cullyn of Cerrmor, personalized their daggers further with some sort of personal mark. Unknown to most, the daggers are also enchanted to glow if handled by someone with substantial elf blood in their veins, and to return to Otho if ever lost. The only known exception to this rule is Rhodry's dagger. To hide his elven heritage (and thus the fact that he was the product of his mother's affair), Otho removed the enchantment of glowing at Jill's request. What he did not expect was that the process also caused the dagger to recognise Rhodry, not Otho, as its true owner, and this was why the dagger would later make its way back to Rhodry after he lost it in Bardek.