means dang or whoa (can be positive or negative)
must be said very casually; can be used to express sympathy, surprise, awe, and many others.
must drag out the "aaa"; not too long, but so it isn't too short; like a crowd at a magic show going "Oooo...Ahhh..."
"Look at those titties ... dag."
(House across the street explodes)- "Dag."
"Grandpa just died? Dag."
Man 1: "I have to write a 1000 page paper on the life of Tony Danza."
Man 2: "Dag."