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Pretty sure the trailer showed the princess getting hit by something that might be fatal so I imagine he'll stop and then reverse time with the dagger to fix that, which seems to be the item's only function in the film.
If you're not paying attention, he uses the dagger before she's about to hit him with a sword. It seems we get time slowing to a halt before the 'turn back time' effect kicks in, so while it won't be a big timestop dealie we've got at least one scene of note.