I don't have any particular strong feelings about Dagur as a character. I like him fine, but I don't feel particularly attached. I think it's cool that he's on the "good" side now, but I can't say I feel particularly excited whenever he shows up. (That isn't to say that I hate having him around either, just that I feel pretty neutral.)
What I really loved about this episode was that it contained a lot of development in terms of Dagur and Heather's relationship. I've enjoyed seeing Dagur come to realize what he actually needs to do to be a good brother, and it's nice to see Heather begin to accept him as her family. While it's bittersweet to no longer have Heather running around with the main characters every episode, it had to happen eventually. I like that she and Dagur get to work on building back up their home instead of Heather being off by herself if she leaves the riders.
Of course, one of Dagur and Heather's main goals now is to find their father. The fact that the show has even brought this possibility up despite his death being taken as a given earlier hints to me that they're planning to do something with it. Is Heather and Dagur's dad going to play a role in season five? I wouldn't be surprised if that's the case after this episode, which also raises the question as to just what sort of character their dad would be. I even wonder if we might have met their dad without knowing it was their dad, and that could lead to a lot of different theories. I'm definitely thinking about it.