Dexterity affects the following:
- Very slightly increases accuracy in combat.
- Increases the effect of Dodging skill on evasion.
- Increases the chances to stab monsters.
- Slightly increases stealth (3 per point - for comparison, boots of stealth give 50).
- Slightly increases your SH bonus with bucklers, shields or large shields.
- Increases the chance of doing auxiliary attacks.
- Increases the chance of doing retaliatory headbutts when you are a minotaur.
If you are casting spells, intelligence is nearly always better than dexterity, but dexterity is still much better than strength for most characters.
If your dexterity is ever reduced to 0 or lower, you will eventually suffer stat zero.
Prior to 0.18, each weapon type had a strength weight that determined how much dexterity contributed to damage and accuracy. Now dexterity increases accuracy equally for all weapons, and does not affect damage.