Translation
The counter for this, I will do to you, so that you do not take my dagger or bind my arm, and my dagger and I will remain at liberty. And then I will wound you in such a way and manner that you will not have a defence for this.
Interpretation
Having attempted to stab your opponent, they have used the play of the 5th scholar of the 1st master of dagger against you. They are going to put you in a high bind unless you act quickly.
With your left hand, push forward against your right as the picture shows. You must be fast to do this before the bind locks on. This will brace your arm so that you have a mechanical advantage, and prevent it from being folded back. The counter master tells us that he will then wound the player, but does not give any details as to how. Several options present themselves as easy plays to flow on to.
Counter to the 1st master of dagger. Swing the dagger over the top of the opponents left arm so that it points off to your right. Using your left hand to add force to the motion, you should be able to break your right arm free of your opponents grip. You will then be well positioned to strike with a mandritto into your opponents ribcage under their left arm.
Counter to the 2nd scholar of the 1st master of dagger. Move the point of the dagger so that it rests against your opponents right arm. Use the leverage that your left hand provides to push it into them. Their arm will give way, allowing you to continue with a finishing strike.
7th scholar of the 2nd master of sword in two hands. Having reached the picture point, there will be a tendancy for this play to devolve into something of a wrestling match. With everyones attention focussed on the dagger and the bind, your opponent will be left wide open for a groin kick. Drive one into them. This will completely disrupt their structure, allowing you to continue the attack.