What I have so far is that back during the Oblivion crisis, Mehrunes Dagon wasn't completely satisfied with his army of Dremora, as even though they served him loyally, he desired a small army of Champions to carry out his most difficult tasks, and the Dremora were simply lacking in his eyes for this purpose. Instead, Dagon enslaved certain humans, banished their souls and gave a fragment of his soul to them. In essence, they were copies of Mehrunes Dagon in human form. They had all of the goals, desires, and power that Dagon himself had, though on a lesser scale. These champions, known to the people of Tamriel as Dagon's "Death Knights" were masters of warfare and instruments of death and destruction. They were immortal due to having the soul of a God, and over the course of the Oblivion crisis they wreaked havoc across Tamriel and showed no mercy. Even the highest ranked Dremora feared them.

After Dagon was defeated and cast back to Oblivion, the souls of the Death Knights were destroyed and all of them ceased to exist as a result, except for one. As it turned out, there was one Death Knight who also had the soul of a dragon. The Dovahkiin lost only some of the power he had as a Death Knight, and retained his dragon soul. Still immortal and much more powerful in this stage then any non-divine being, he set out in a trance of rage, destroying anyone and anything that had to do with the Deadra because of Dagon's failure to be his master. The other Deadra soon imprisoned him for his heresy however, and he was cast into a Deadra realm of nothing. For 300 years the complete silence, darkness and loneliness destroyed him from the inside out. He forgot everything he knew, including Dagon's magic that made him so powerful in the first place. After this time though, Akatosh and the other Divines intervened and released him back to Tamriel, for they knew he was the only one who could stop Alduin. Now serving as the champion to Akatosh, his new master, the former Death Knight set out to Skyrim and was forced to remember and relearn the powerful magic he had long since forgotten. Once he gained back his strength, he faced Alduin and defeated the beast. As a reward for his obedience, Akatosh freed him of his Deadra soul, and left him only with the soul of the Dovah.