Knife
The knife is (like the sword and, in some sense, scissors) an instrument for cutting and, symbolically, a tool for discernment, separatio (compare Two). The ability to divide and distinguish content is crucial for psychological development. In an unconscious state, one cannot distinguish one thing from another, for example, psychologically separating one's own psyche from a partner's, one's ego from a complex, viewing opinions as abstract concepts rather than identities, and so on. Consciousness develops through differentiation.
In dreams, one might need a knife to cut something but find that it is either missing or not sharp enough – meaning that one currently lacks the solution to the problem described in the dream. "All kinds of sharp and pointed objects symbolize the intellect's la qualité tranchante ..." (Jung 1997, p. 112.)
On the other hand, the knife, or intellectual ability's separating and analyzing power, can harm the content. In the context of dreams, sharp analysis is not always appropriate; it is more about relating to dream figures as they are, rather than "cutting" into them.
The knife (and the sword) can also be used as a weapon and then has a different symbolic meaning, usually phallic, referring more to penetration or fixation (the latter may be required for separation).