The history between the two of them has always been a volatile one. Whenever Dagur came to Berk with his father, Oswald the Agreeable, Dagur would spend his time with the other kids. Dagur's violence streek was long even at that age, nearly drowning Hiccup, using him as a target for knife throwing, and locking Fishlegs in a cage for days only to force-feed him rotten fish-heads.
After Hiccup's victory over the Red Death, Dagur came to berk to renew his tribe's treaty with the Hooligan Tribe, revealing that he is now chief of the Berserker tribe. It is clear that Dagur has heard of Hiccup and his "conquering" dragons, and keeps a sharp eye out for anything suspicious. He nearly kills Barf and Belch to use their blood for ink to sign the peace treaty, only to run from the island in terror from a "dragon attack" staged by Hiccup.
Later, Hiccup and Dagur meet back up on Dragon Island. Hiccup and the other dragon-riders are there to practice their survival skills, while Dagur is there, with his entire armada sailing along the coast, to hunt dragon. Dagur is happy to see him, convinced that Hiccup saved his life from Toothless back on Berk, even going so far as to call him "brother". Hiccup tries to keep the charade going, even as the other riders show up, only to drop it in order to save Toothless. Dagur, enraged from being made the fool, vows that Hiccup will die and that Toothless will be his.
The rest of their encounters are purely antagonistic by nature, Dagur taking steps from planting Smothering Smokebreath dragons through Trader Johann, to digging out a Skrill to unleash devastation at the helm of their ship. he nearly suceeds when he kidnaps Stoick and holds him for ransom, wanting Toothless in return.
Three years later, Dagur escapes Alvin's dungeon, even more unhinged and determined than ever. Since then, Dagur sees more as a rival and "frenemy" over being an actual enemy as he portrayed Hiccup after learning the truth. While he still sees Hiccup as an opposing force - hoping to capture them and imprisoning his friends on a sinking ship to buy them time - Dagur enjoys teasing and goading Hiccup relentlessly, either to convince him to switch sides or tempt him to go against his ethics. He still calls Hiccup "brother", saying it in a manner to where Dagur may actually be convinced that Hiccup may actually be his brother, a sign of his eroded mental state.
How this pairing goes differs from story to story. Some portray the relationship as an abusive one, Dagur asserting his dominance on Hiccup out of ownership, only for Hiccup's friends (most often Jack) to intervene. Dagur may actually have feelings for Hiccup, needing comfort and relief from the one person who would understand him and his ways. In other scenarious, Hiccup (as a girl) is married off to Dagur as part of an arranged marriage to cement their treaty concrete.
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