Bloodthirst Dagger Explaination??

[Silverghost]

Can someone please explain how this special weapon works?

Here is the description from the PRD online.

Spoiler:

The blade of this +2 wounding dagger is brightly polished. Even when drenched in a victim's blood, it appears clean and dry moments later, as though it has been newly cleaned.
A bloodthirst dagger rewards its wielder most when used relentlessly against a single target. When attacking a creature that is still bleeding from the bloodthirst dagger's wounding property, the dagger deals an additional +1 point of damage against the target for each bleeding wound the creature possesses (maximum +10). Whenever the wielder of bloodthirst confirms a critical hit with the weapon, she can choose to deal 1d6 points of additional damage for each still-bleeding wound the target possesses (maximum +5d6 damage). This additional damage is not multiplied by the critical hit, but is in addition to the damage normally added for bleeding wounds. Dealing this damage immediately heals all bleeding wounds possessed by the wielder.

Then the wounding property says this in the PRD.

Spoiler:

This special ability can only be placed on melee weapons. A wounding weapon deals 1 point of bleed damage when it hits a creature. Multiple hits from a wounding weapon increase the bleed damage. Bleeding creatures take the bleed damage at the start of their turns. Bleeding can be stopped by a successful DC 15 Heal check or through the application of any spell that cures hit point damage. A critical hit does not multiply the bleed damage. Creatures immune to critical hits are immune to the bleed damage dealt by this weapon.

Q1) Does the 2nd hit of a wounding weapon...
a) Deal 2 bonus damage and increase the bleed to 2
b) Deal no bonus damage and increase the bleed to 2
c) Deal 1 onus damage and increase the bleed to 2
Q2) How does the bloodthirst dagger work on the 6th hit if it's a critical...
a) 6 damage from wounding, +5 damage from the property, option for +5d6 more damage?
b) or something different that I'm not understanding?

I'm trying to figure out what makes this good versus just getting something with a couple of extra 1d6 bonuses like Flaming and Frost.

[Nefreet]

I believe it would go like this:

1st hit: 1d4+2 plus 1 bleed
Critical hit: I don't believe a crit on the first hit gives you the option of adding 1d6 bleed as the wound hasn't "bled" yet ("still bleeding"), though I can see it being interpreted either way.
2nd hit: 1d4+3 plus 2 bleed
Critical hit: 2d4+1d6+6 plus 2 bleed
3rd hit: 1d4+4 plus 3 bleed
Critical hit: 2d4+2d6+8 plus 3 bleed
4th hit: 1d4+5 plus 4 bleed
Critical hit: 2d4+3d6+10 plus 4 bleed
5th hit: 1d4+6 plus 5 bleed
Critical hit: 2d4+4d6+12 plus 5 bleed
6th hit: 1d4+7 plus 6 bleed
Critical hit: 2d4+5d6+14 plus 6 bleed
. . .
10th hit: 1d4+11 plus 10 bleed
Critical hit: 2d4+5d6+22 plus 10 bleed
11th hit: 1d4+12 plus 10 bleed
Critical hit: 2d4+5d6+24 plus 10 bleed; this is where its damage maxes out

So, as you can see, over the course of multiple hits, the weapon will deal considerably more damage than just a +1 Flaming Frost Dagger, but in my experience combats don't typically last that long against a single opponent (let alone an opponent capable of bleeding).

It'd be a good weapon for a villain to wield against the PCs, and much more thematic/creepy/scary than a mundanely enchanted weapon.