This weapon is most likely based on an old civil war cavalry dagger with slight Bowie Knife features. It is more powerful than the knife, and is capable of one-hit killing most of the enemies in single player.
Automatically given to player's weapon cache in single player.
The original HUD icon shows that the Dagger is more squared with a narrow edge and the line starts on the handguard. However, the in-game Dagger is slighty curved to the end, and the line starts from some sort of marks next to the same handguard. The enhanced HUD Icon, however, features a more correctly modeled version, but lacks the detailing on the handguard.