To use the knife as the tool, means that you are able to move the circumstances to be favorable to you. You know how to deal with problems and troubles. The knife helps you to reach your goals in life. If you are cutting something with the knife, it shows that you are already in the process while dealing with it. The knife that is broken, shows the problems you do not have ability to solve.
Read more about dreaming of Knife (as a tool) in other dream meanings interpretations.