To dream of a butcher knife symbolizes conflict that is severe, drastic, or totally uncaring. A problem person or situation that wants it all while giving nothing back. A problem that wants your absolute failure and nothing less. Unyielding beliefs or a total unwillingness to compromise with issues you are struggling with.
You may feel someone is out to get you and leave you with nothing. Alternatively, it may reflect your own attempt to cut someone off completely.