The 24-year-old put the Iron on course to their first win in 2011 by clattering home from close range under pressure from Forest full-back Chris Gunter.
Defeat for promotion-chasing Forest curtailed their 10-match unbeaten run and saw them miss the chance to move into second place.
The visitors missed a plethora of chances either side of the break and came closest through substitute Dele Adebola, whose header rattled the bar in the 74th minute.
Scunthorpe boss Ian Baraclough was forced into a change heading into the game as on-loan striker Joe Garner was ineligible to face his parent club, meaning Dagnall started in his place.
The visitors, meanwhile, made two changes to the team that drew 1-1 with league leaders QPR on Sunday.
Nathan Tyson was welcomed into the starting line-up in place of suspended midfielder Radoslaw Majewski, while Robert Earnshaw started in place of David McGoldrick.
The original clash at Glanford Park was cancelled in December due to the icy conditions and the tough winter was still evident in north Lincolnshire, with the pitch looking worse for wear.
Both sides struggled to adapt to the conditions during the opening exchanges and it took 15 minutes for either side to carve out a clear opening, with Dagnall heading over Mark Duffy's right-wing cross for the hosts.
Shortly afterwards Forest had an ample opportunity to score the opener, but Tyson put wide inside the penalty area after seemingly catching his studs in the turf.
Tyson was made to pay for his futility in the 19th minute when Dagnall broke the deadlock.
Duffy played the ball out wide to Middlesbrough loanee Lee Miller, whose low cross from the right was bundled home by Dagnall under pressure from full-back Gunter inside the six-yard box.
The goal - only United's third in eight league matches - was almost followed up immediately by another, but Lee Camp saved well from Josh Wright's 20-yard effort.
After that, though, the Iron had to withstand a barrage of Forest attacks until the half-time whistle.
The scoreline belied the first-half action and Forest continued to dominate proceedings after the break, with Marcus Tudgay's goalbound shot blocked shortly after the restart.
Scunthorpe, however, still threatened to double their advantage and Dagnall came close in the 61st minute, heading Duffy's free-kick narrowly wide of the top-right corner.
In a bid to change the attacking dynamics and path of the game, Forest boss Billy Davies brought on McGoldrick and Adebola midway through the second half.
And the Scot's move almost paid dividend in the 74th minute when the latter stooped in to header Gunter's cross onto the bar.
Forest, though, were continually frustrated in the closing stages through a mixture of goal-line clearances and resolute defending, which secured Scunthorpe victory and sent the 1,925 visiting fans home disappointed.