What is the functional difference between daggers and short swords?

Solution 1:

There is no difference in the current version. However, the original Crypt of the Necrodancer allowed you to throw your dagger. Perhaps that feature was originally intended but left out in the end. Both weapons have different pools, though: a life-stealing short sword won't get you a life-stealing dagger automatically.

By the way, Cadence can also use daggers but not short swords.