borrows Two-bits switchblade while he is in the hospital recovering from the injuries he sustained in the fire.   He uses it as a tool to get out of the hospital because he wants to join the rest of the Greasers in the planned rumble.  After fighting in the rumble, Dally and Ponybody return to the hospital where Johnny is dying.  After his death, Dally leaves the hospital himself and sets himself up for his own death.  In that way, you can say that him borrowing Two-bits switchblade ultimately caused his death.

Two-Bit got his prized switchblade by stealing or shoplifting it; the narrator, Ponyboy, insinuates that this is probably the only way Two-Bit could ever have owned one, since Two-Bit was poor like the rest of them and couldn't have afforded to pay for it. Ponyboy says,

He was famous for shoplifting and his black-handled switchblade (which he couldn't have acquired without his first talent) . . .

Although it's a small detail, it's relevant, as it leads to an important insight into Two-Bit's personality. Part of the reason that Two-Bit is well known for both shoplifting and the switchblade he carries is because he tells anyone who will listen about it. In fact, Two-Bit usually tells everyone about everything; he is funny and an attention-seeker, always having to "get his two-bits' worth in," which is how he came to earn his nickname.

Later in the story, the switchblade becomes even more symbolic. Two-Bit is confronted by one of the Socs and draws the switchblade to defend himself. Up to this point, Ponyboy has described Two-Bit as a bit of a joker: lighthearted, always laughing and making others laugh. The sudden turn in his demeanor adds to the tension of this situation, highlighting the day-to-day reality not only for Two-Bit but for all of the greasers.

In The Outsiders, Two-Bit is described as a tough character with a devil-may-care attitude. His most prized possession is his ten-inch, black-handled switchblade, which he procured through shoplifting.

According to Ponyboy, Two-Bit has a great sense of humor and never shrinks from a good fight. The greasers look up to Two-Bit because of his resilience and determination, his drive to prevail against all odds.

For Two-Bit, the switchblade represents autonomy, rebellion, and survival. In brutal fights against the Socs, it serves as a means of protection. And during interactions with law enforcement personnel, the blade reinforces Two-Bit's bravado. Two-Bit prizes his blade because it provides him with a sense of safety, empowerment, and pride.

In the book, Two-Bit lends his switchblade to Dally, who is determined to prevail against the Socs and avenge Johnny's death. Later, the greasers win the fight against the Socs, and both Ponyboy and Dally visit Johnny in the hospital.

The boys arrive in time to spend a few last moments with Johnny before he dies. Upon Johnny's death, Dally breaks down. In chapter 10, the text tells us that Dally dies after pulling an unloaded gun on the police. Thinking that Dally's gun is loaded, the officers shoot Dally, who dies with a look of "grim triumph" on his face.

Interestingly, Dally dies with Two-Bit's switchblade in his pocket. Later, Two-Bit complains bitterly about the loss of his switchblade after the police search Dally's body. When asked about his surprising reaction to Dally's death, Two-Bit admits that the loss of the switchblade isn't the only thing bothering him. It's obvious that Two-Bit relies on his switchblade as a defense mechanism against feelings of powerlessness.

When Ponyboy and Two-Bit go see Dally in the hospital, he asks about Johnny. From the responses of Ponyboy and Two-Bit, Dally realizes that Johnny may die from his injuries. This realization makes Dally fearful, as his love and his protectiveness for Johnny are strong. For Dally, fear transforms immediately into rage, and he needs a weapon to exact the revenge he suddenly desires in an intense way.

Though Johnny's decision to try to save the children from the fire had nothing to do with the Socs, Dally blames the Socs and hates them for having privileges that he and Johnny lack. That night, the rumble between the greasers and the Socs to end all rumbles is scheduled, and Dally wants to borrow Two-Bit's prized possession to make sure he is prepared for the rumble. Dally, in his anger and grief, is ready to hurt someone at the rumble with the Socs later in the novel, and Two-Bit hands over the weapon without a second thought. After all, according to Ponyboy, "Dally knew how much that knife meant to Two-Bit, and if he needed a blade bad enough to ask for it, well, he needed a blade."