A Dacra looks like a normal knife, with a sharpened silver rod in place of a blade, however it is infinitely more lethal. If a Dacra pierces the skin of a person, even on a place as small as the little finger, that person is placed under the weapon's power. The wielder of the Dacra need only open themselves to their Han and their victim will die instantly.
Dacras were created by the wizards of old and were infused with both Additive and Subtractive Magic. The magic infused works only in conjunction with a gifted person opening themselves to their Han and a Dacra is nothing more than a normal knife in the hands of someone who is not gifted. It is suggested in Blood of the Fold that even the use of a Rada'Han could trigger the dacra's power.
Behind the scenes
In the television series Legend of the Seeker, a dacra is depicted as a large, three-pointed star made from oblong rings capable of being folded, making the weapon appear more or less the same as a mundane knife. The dacra is shown to be effective as a thrown weapon, though it is used for close-quarter fighting as well. Legend of the Seeker also gives the dacra an additional magical ability-- the power to absorb the Han of its victim and transfer it to the dacra's wielder. In the novels Sister Verna does absorb the Han of Elizabeth Myric and Grace Rendall, but there is no indication that a dacra was used in the process. Sister Grace kills herself using a dacra when Richard refuses the first offer, and passes her gift on to Sister Elizabeth and Sister Verna. When Richard refuses the second offer and Sister Elizabeth attempts to kill herself, Richard stops her, prompting Verna to use her dacra on Elizabeth to kill her. Thus, Sister Verna has the power of three sorceresses, but the dacra has no bearing on the passing of the gift. Rather, Han is passed on if there is both a receiver and "giver", i.e. one who is killed.