The Dagger VIII was probably as good/bad as early Taurus, but not as good as early Merlin (III and the like). It will make less drag than Taurus, though, and we could actually use some exhaust thrust without problems. The altitude power was, for example, just 800 HP @ 4200 rpm at 15000 ft, so yes, already the Peregrine would've been an improvement for altitudes above 12000 ft.
My cunning plan is to have MB-2 re-engined with Merlin III, XII, and later with 45, while introducing the retractable U/C, 2 cannons. Should be faster than Hurricane and P-40, hence leveling the playing field as much as possible vs. Bf 109, MC.202, Zero, while kicking out the Bf 110, Oscar, Nate and MC.200. Hurricane is relegated to the mud moving job, so it does not receive Merlin XX, these engines going into Spitfire III that gets produced.