The Collaborative International Dictionary of English v.0.48:

Knacker \Knack"er\, n.
   1. One who makes knickknacks, toys, etc. --Mortimer.
      [1913 Webster]

   2. One of two or more pieces of bone or wood held loosely
      between the fingers, and struck together by moving the
      hand; -- called also clapper. --Halliwell.
      [1913 Webster]

The Collaborative International Dictionary of English v.0.48:

Knacker \Knack"er\, n. [Cf. Icel. hnakkr a saddle.]
   1. a harness maker. [Obs. or Prov. Eng.] --Halliwell.
      [1913 Webster]

   2. One who slaughters worn-out horses and sells their flesh
      for dog's meat. [Eng.]
      [1913 Webster]

WordNet (r) 3.0 (2006):

knacker
    n 1: someone who buys old buildings or ships and breaks them up
         to recover the materials in them
    2: someone who buys up old horses for slaughter