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1. A turd hanging off the rear end of a sheep (caught in the fleece).

2. Someone who is daggy, i.e. uncool. This can be meant insultingly or affectionately. (Much like that other well-known Australianism, "you old bastard".) On the face of it, it's an insult, but there are ways in which it is seen as admirable to be a dag – having one's own style, not caring for public opinion, being outrageous, being a source of friendly amusement, being original.
1. "About time the farmer cut off those dags."

2. (a) Insulting: "I wouldn't go out with him, he's the biggest dag around."

(b) Affectionate: "She's such a dag, we always have heaps of fun."

3. Comedian John Clarke's character on New Zealand and later Australian radio, Fred Dagg, so named for obvious reasons.
dag by SnakyPoet January 2, 2008
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An Australian slang term.
A dag is technically the matted wool on a sheeps tail, but in typical useage throughout Australia, it refers to people who don't have a neat, tidy or cultured appearance. It can also refer to a person who tends to be quite informal.
It is not necessarily a derogatory term in modern useage.
I'm a bit of a dag today, I'm wearing my wordtrackie-daks/word
dag by Random September 3, 2003
Related Words
Dag Dagger dago dagger dick dagnabbit dagan dag yo dagar Daggy Dagny
1) "damn..."
2) expression of surprise or amazement
1) Dag...I got fired from Dempsey's
2) You mean you found 7 mosquitoes in one omelet? DAG!
Dag by Nick D February 21, 2003
1. dirty wool around sheeps bum.
2. An unfashionable person.
2b) term of endearment for a unfashionable person that tells corny joke.

Whether it is a term or an insult depends on the context.
"John Travolta is such a dag!"(term of endearment)
"God you are so daggy." (insult)
dag by K.C.D.L. May 26, 2004
affectionate insult for an odd, idiosyncratic person
He's a bit of a dag but we love him.
dag by Hamish Alcorn April 25, 2005
DAG: noun 1a. (usually in the plural) a lump of matted wool and faeces hanging from the rear end of a sheep; b. such a lump cut from a sheep. 2. a person (primarily male) who is regarded as something of a ‘character’, eccentric but entertainingly so, a wag. 3a. an unfashionable adolescent. b. any unfashionable or non-stylish person.
I told you to shear the dags off those sheep Bruce not turn 'em into bloody dredlocks! You bloody dag!
dag by Dagalicious December 11, 2003
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."
dag by Beef Jerkin April 18, 2004