Strictly WITHOUT running the math, I would say lower def. dagger, since THF has a fairly high acc on most things via gear, merits and skill, doing a bit more damage per hit should always be good. But granted, it depends on your gear and blah blah. I'm sure someone will run the math; just my two cents.
Dec 1st 2008- "Hey maybe they will throw in a B in H2H just because they ignored this issue for so long(pfft yeah right).
2010 - (03/22/2010) The Version Update Has Arrived!
"The following changes have been made to puppetmaster:
Hand-to-hand combat rating has been raised from rank C to B+."
...Well what'ddya know!