The word in question is a different way to spell the word for an embankment that holds water out of the Netherlands. It is an adaptation of "diag" which is short for the "diagonal" in "diagonal cutters". (wikipedia)

I think the use of such a word for diagonal cutters is quite regional. I never heard it in Minnesota where I grew up, but in New England it seems pretty common. I have a friend from Kansas City who says his dad used the word, but when he moved to California nobody knew what he was saying.