Buy balsa wood from your local craft store. Choose a length and thickness for your dagger blade and hilt (as one whole piece) and a separate wider piece for the dagger's hand guard or "cross." Keep in mind that traditional dagger style wasters were approximately 18 to 24 inches long from hilt end to dagger tip.
Cut the cross piece of balsa with the fine-toothed saw to your desired hand guard size. Place the end of your dagger blade and hilt piece of balsa in the center of the cross piece and trace the shape of the end of your dagger blade and hilt piece onto the cross. Carve out the middle with your knife.
Push the dagger blade and hilt piece through the hole in the cross piece until the cross is positioned at the spot where you would like the hilt to end and the blade to begin. Run a bead of glue along the edge where the two pieces meet both above and below the cross.
Dry your rough dagger for 24 to 48 hours.
Carve the balsa blade and cross to your desired shapes. If you are uncertain how to shape a wooden blade and cross, follow the link to Wooden Weapons in the Resources section to see examples of various types of wooden daggers.
Remove any splinters or sharp edges with find grade sand paper. You can also refine your dagger's appearance or add greater detail with your knife and various grades of sand paper.
Paint the blade and cross with metallic wood paint and then wrap the hilt section with leather trim to create a grip and give the dagger a more realistic appearance. To add further realism, glue faux gemstones to the blade. If you would like to add a faux pommel (ball that traditionally acts as a counterweight to the blade), glue faux gemstones to a metallic painted wooden ball and then glue the ball to the end of your hilt end.