Margaret (Markéta in Czech) had one brother, Vratislav, and two sisters, Božislava and Hedvika. Her father became the Duke of Bohemia in 1192, but in 1193 was deposed. He then left Bohemia with his family.
Adelheid with her children found a new home at the court of her brother Albert, Margrave of Meissen, and her husband Ottokar became a mercenary for German rulers. In 1197, Ottokar became the Duke of Bohemia for a second time. He repudiated Adelheid and divorced her in 1199 on the grounds of consanguinity. He married Constance of Hungary later the same year. This step, together with other maneuvers, helped him later to obtain the hereditary elevation of his title to king.
Adelheid did not waive her rights. In 1205, she returned to Prague temporarily. At that time, Ottokar decided to marry their daughter, Margaret, to Valdemar II of Denmark. However, Constance gave birth to a son, later King Wenceslaus I of Bohemia the same year. Adelheid left Bohemia soon and died a few years later.
Before his first marriage, Valdemar had been betrothed to Richeza of Bavaria, daughter of the Duke of Saxony. When that engagement fell through, he married Margaret in 1205 in Lübeck. In 1209, the new queen, now known as Dagmar, gave birth to Valdemar the Young.
Not many things are known about Dagmar as a person. According to Rydårbogen (1250), queen Dagmar influenced Valdemar to release one of his most fervent enemies, Bishop Valdemar of Slesvig, in 1206. Most of the image of Dagmar comes from later folksongs, myths and legends, designed to present her as an ideal Christian queen; mild, patient and universally loved, in contrast to her unpopular successor, Queen Berengaria.
Queen Dagmar died on 24 May 1212 while giving birth to her second son, who did not survive. Old folk ballads say that on her deathbed she begged Valdemar to marry Kirsten, the daughter of Karl von Rise, and not the "beautiful flower" Berengária of Portugal (Danish: Bengerd). In other words, she predicted a struggle for the Danish throne between the sons of Berengaria.
After Dagmar's death, in order to build good relations with Flanders (a commercially important territory to the west of Denmark's hostile southern neighbours), Valdemar married Berengária of Portugal in 1214.
Queen Dagmar is buried in St. Bendt's Church in Ringsted, Denmark, on one side of Valdemar II, with Queen Berengária buried on the other side of the King.
Valdemar II elevated his son with Dagmar as co-king at Schleswig in 1218. Valdemar the Young was accidentally shot while hunting at Refsnæs in 1231.
A pectoral cross now well known as the Dagmar Cross was found lying on the breast of Queen Dagmar remains when the tomb was opened about 1690. The jewel of Byzantine design and workmanship, is of gold, enamelled, having on one side a crucifix, and on the other side portraits of Christ in the center, St Basil, St John Chrysostom, Mary the Virgin and St John the Apostle-Evangelist. The Dagmar Cross, in the modern era, "is worn by Danish girls for their confirmation into the Lutheran Church, and is also given to children as a baptismal gift." In the neighbouring Lutheran Church of Sweden, "the cross is now delivered to the new bishop, on his installation in office, by the archbishop of Upsala, together with the mitre and crozier."