Missing the Timing: Because the effect of “Butterfly Dagger – Elma” is an optional “when… you can” Trigger Effect, “Butterfly Dagger - Elma” being sent to the Graveyard has to be the very last thing that happened in order for you to activate its effect. So if it is destroyed in the middle of a chain, you cannot return it to your hand. Example: If the turn player activates “Pot of Greed”, and the opponent chains “Mystical Space Typhoon” to destroy “Butterfly Dagger - Elma” during the chain, it cannot return to the owner’s hand.
If the monster that “Butterfly Dagger - Elma” is equipped to is destroyed as a result of battle, or by a card effect like “Sakuretsu Armor” or “Fissure”, then “Butterfly Dagger - Elma” cannot return to your hand because it is no longer equipped to a monster. However, if the monster and the “Butterfly Dagger - Elma” are destroyed simultaneously by a card like “Final Destiny”, then you can return it to your hand.
While “Imperial Order” is active, if “Butterfly Dagger - Elma” is destroyed and sent to the Graveyard, it can return to your hand.
When you activate “Butterfly Dagger - Elma” and your opponent chains “Mystical Space Typhoon”, it cannot return to your hand.
When “Butterfly Dagger - Elma” is “sent to the Graveyard” without being “destroyed”, such as with “Woodland Sprite”, it cannot return to your hand.
If “Butterfly Dagger - Elma” is negated and destroyed by “Ryu Senshi” or “Freed the Matchless General”, it cannot return to your hand.
While “Morale Boost” is active, if you equip “Butterfly Dagger - Elma” to “Gearfried the Iron Knight”, 1) Increase your Life Points for “Morale Boost”, 2) destroy “Butterfly Dagger - Elma” with “Gearfried the Iron Knight”’s effect, 3) inflict damage for “Morale Boost” when “Butterfly Dagger - Elma” is sent to the Graveyard, 4) the owner of “Butterfly Dagger - Elma” can return it to his/her hand.
If “Butterfly Dagger - Elma” is destroyed during the Damage Step, such as by the effect of “Cliff the Trap Remover”, you cannot activate the effect that returns “Butterfly Dagger - Elma” to the hand.
Netrep Rulings:
“Disappear” can be chained to the activation of “Butterfly Dagger – Elma’s” return to the player’s hand effect. “Disappear” will resolve as Chain Link 2 to the “Butterfly Dagger – Elma’s” effect of Chain Link 1. “Disappear” will resolve first, removing “Butterfly Dagger – Elma” from play. “Butterfly Dagger – Elma’s” effect will then disappear.
If “Butterfly Dagger – Elma” is equipped to “Freed the Matchless General,” “Freed the Matchless General” will negate and destroy “Butterfly Dagger – Elma.” “Butterfly Dagger – Elma” will not return to the player’s hand.
If “Butterfly Dagger – Elma” is equipped to a monster already equipped with “Rod of Silence – Kay’est,” “Butterfly Dagger – Elma” will be negated and destroyed by the effect of “Rod of Silence – Kay’est” and “Butterfly Dagger – Elma” will not return to the hand. If “Rod of Silence – Kay’est” is equipped to a monster already equipped with “Butterfly Dagger – Elma,” “Butterfly Dagger – Elma” will be negated and destroyed by the effect of “Rod of Silence – Kay’est” and “Butterfly Dagger – Elma” will not be returned to the player’s hand.