According to Google, "daggy" is an Australian / New Zealand slang which means scruffy or unfashionable. So, "it was the daggiest thing" means that something (probably clothing) was really unfashionable, or uncool, for example, somebody wearing socks and sandles at the same time, (ewwww...)

something untidy, not cool, not trendy, unclean (comes from the word daggy)

Gary, thank you very much!

No - more 'amusing'.

You mean, this "funny" would mean "foolish"?