additional to the previous definitions: australia (and new zealand) are sheep-farming countries and our populations are familiar with many of the aspects of farming livestock. a "dag" or "dags" is the colloquial term for the dung which collects and mats into the fleece immediately surrounding a sheep's anus; it hangs in dried-out dangling clumps which make a sound when the sheep runs, hence the phrase "rattle your dags". a sheep should be "ring crutched" to avoid or relieve this condition: crutching is the removal by shearing of all fleece surrounding the genitals usually in a circular shape or ring. a sheep not cared for properly in this way will otherwise collect dags - hence the possible connection to insults concerning fashion and appearance. the sight of a daggy sheep is unattractive and comical, although the mats of contaminated fleece may be painful and usually attract blowflies and other pests; and therefore to call someone "daggy" is to liken them directly to a neglected sheep's anal region suffering from this condition.
oh gross that outfit makes you look totally daggy - take it off quick!
This actually refers to farming... A dag is what happens when a sheep (or any farm animal with long hair) craps and the crap gets stuck in the hair, thus forming a dag.
To call someone Daggy, is to call them dirty/messy/hair full of crap.
The opposite of trendy. Uncool, in an unfashionable sense. Think so last season, or old fashioned. Applies to people and things, not just fashion. Not particularly insulting; can even have friendly undertones.
That flanalette shirt is so daggy; why don't you update your wardrobe ?
Stop hanging out with your daggy friends, get with the hip, new crowd.
May also come from the Tasmanian sheepfarming term 'to dag the hogget', i.e. to remove the testacles of a sheep by biting open the scrotum and sucking them out of the sack. After a day of this gruelling work one would be left covered in sheep's blood and faeces, leaving the person 'daggy'. See Errol Flynn's autobiography 'My Wicked Wicked Ways' for a graphic description of this practice.
My face and neck were covered in sheep crap after a hard afternoon of dagging the hogget. I was totally daggy.