Wikipedia
Sir Dagonet was King Arthur's well-beloved jester, and a Knight of the Round Table of Arthurian legend. He saw himself as a courageous warrior and would present himself as such. Yet, in reality, he would flee at the slightest provocation. He often battered his own shield so that it appeared that he had been in a fight - telling all that he emerged victorious of course.
Dagonet’s tom-foolery was legendary. He once playfully “captured” Sir Lancelot by leading his horse to Queen Guinevere and the noble knight was dubbed "Dagonet’s Prisoner" to great hilarity. During the False Guinevere’s reign, the jester took on the administration of the Royal Court and bankrupted the household. Yet, the unfortunate treasurer, Pole, was killed for reproving him. Sir Gawain even adopted the name Dagonet as an ironic alias during one of his adventures.
The Knights of the Round Table often used Dagonet to play practical jokes on their rivals or their enemies. Sir Kay arranged for Sir Breunor to joust with Dagonet at his first tournament, in order to deprive him of the honor of defeating a true knight. On another occasion, Arthur's men pointed out Dagonet to King Mark of Cornwall and told him he was Sir Lancelot. The cowardly monarch fled screaming into the forest. Sometimes however, the jester came off a little worse for wear during these episodes. The poor man was beaten by the temporarily insane Sir Tristan and went mad himself, when his wife was abducted by Helior of the Thorn. Sir Dagonet, however, tracked him down and killed him.
In Thomas Malory's Le Morte D'Arthur, he is mostly portrayed as a buffoon who has been knighted as a joke, and is defeated by Sir Breunor.