I hadn't given much thought to Dagur's fate before watching this episode because, to be frank, he's just not a character that I give much thought to, but the fact that he was alive wasn't all that surprising to me.
My favorite aspect of this episode was getting to see Heather and Dagur begin repairing their relationship. They're still not 100% there, but I think this episode made it clear that they will be some day. Dagur coming to realize how to actually create a relationship with his sister is probably my favorite part about his character growth so far.
While it's bittersweet that Heather leaves the Dragon Riders, it was bound to happen sooner or later. We still get to see her later in the season, so I don't feel like I can complain. I'm interested in seeing how much she appears in the next season.