Deranged bloke holds one small dagger (7)
I believe the answer is:
obelisk
'dagger' is the definition.
('obelisk' can be a synonym of 'dagger')
'deranged bloke holds one small' is the wordplay.
'deranged' indicates an anagram.
'holds' is an insertion indicator.
'one' becomes 'i' (Roman numeral).
'small' becomes 's' (abbreviation - e.g. clothes size).
'bloke' is an anagram of 'obelk'.
'i'+'s'='is'
'obelk' enclosing 'is' is 'OBELISK'.
(Other definitions for obelisk that I've seen before include "Cleopatra's Needle, for instance" , "Tapering, rectangular stone column" , "Cleopatra's Needle, for example" , "Eg Cleopatra's Needle" , "Needle-like column" .)