Translation
This is another match of sword and dagger. The one that holds the sword with the tip of the sword on the ground as you see, says to the one with the dagger that holds him by the collar, ‘Come between with the dagger from your position, that when you try to strike with the dagger I will beat my sword over your arm. And in that moment, I will unsheathe my sword going back with the right foot behind, and so I will wound you with my sword before you strike me with your dagger.’
Interpretation
Like the 2nd master of sword vs dagger, the 3rd master is caught unawares in a grab and stab style ambush by a dagger weilding assailant. Although the sword tip is down rather than resting up by the shoulder, both the 2nd and 3rd masters hold the sword with the thumb by the crossguard, ready to draw.
With a minimum of body movement, roll your hands in a tight circle. The blade will move in a fast arc behind you, transitioning through the picture point of the 2nd master, and striking with a fendente cut intside your attackers, now presumably, raised and chambered right hand. Drive your left hip forward to maximise the impact.
You are aiming to strike into the crook of your opponents right elbow. This will casue the arm to collapse, and the hand to roll inward. The inward roll will throw the dagger tip inside the line of the scabbard, further tangling the attack. If you hit hard and accurately enough, the hand will pop open and the dagger will fall to the ground.
Having broken the attack, step back with your right foot as demonstrated by the scholar of the 2nd master. Leaving your left hand in place to jam up your opponents attacking hand, draw your sword as you step back.
You have an open target to thrust into. Make the best use of it, but also be aware that your frenzied and dying opponent can still potentially put in an after blow as long as you remain in narrow play.