Dago means: A crewman who speaks Spanish, Portuguese, or Italian.. The word is mostly archaic or historical; you will only encounter it in old texts, period drama, or school history rather than current teen conversation. It is generally derogatory or offensive; worth a quiet word about how it lands on the person being described. If your teen uses it, context will usually make the intent clear. A short, curious question about where they heard it is usually all that is needed to know whether to follow up.