(An) A dagger used in self-defence in ale-house brawls.
“He that drinkes with cutlers must not be without his ale-dagger.” (1589). (See N.E.D.) Pierce Pennilesse says: “All that will not ... weare ale-house daggers at your backes [should abstain from taverns].”
See Shakespeare Society, p.55.
Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894