A Danish member of the Waffen SS would NOT have been awarded a Dagger.....not unless he'd been a member of the A-SS previously (and if a Dane, that would have been impossible unless he'd relocated to Germany.....). So that part of the story....without more documentation, is probably "boloney".....
The Dagger appears to be original, and appears to be in decent condition. M7/68 RZM 1316/40 SS is for "Tigerwerk- Lauterjung & Co.".....but detailed examination would STILL BE NECESSARY! There may have been an attempt to denazify it, which would hurt (file marks on the swas. ?)
Without any "story" and not considering any documentation or other items....the Dagger would be worth between $1200.00 and $3000.00 US depending on "who, what, and where".....who your selling it too; what exactly it "is" and what condition it's in; and where you're selling it..(private sale, retail, or dealer prices, etc.).
As stated....NEVER BELIEVE THE STORY....judge the item on it's own merits....if the story "rings true" that's fine...but the item has to stand on it's own. This "story" does NOT, IMO! (Unless the documents can PROVE otherwise- (Prewar SS membership)!
Nice dagger...on it's own right (assuming....),