It was during the Battle of Hamel that Dalziel performed the deed for which he was awarded the Victoria Cross (VC). Assigned to the battalion's transport company as a driver, he volunteered to join the attack to make up for a manpower shortage that the battalion was experiencing at that time. On 4 July 1918 at Hamel Wood, when determined resistance was coming from an enemy strong-point which was also protected by strong wire entanglements, Dalziel, armed only with a revolver, attacked an enemy machine-gun. He killed or captured the entire crew and, although severely wounded in the hand, carried on until the final objective was captured. He twice went over open ground under heavy artillery and machine-gun fire to obtain ammunition and, although suffering from loss of blood, continued to fill magazines and serve his gun until wounded in the head. The citation for his VC, published in the London Gazette, read:
For most conspicuous bravery and devotion to duty when in action with a Lewis gun section. His company met with determined resistance from a strong point which was strongly garrisoned, manned by numerous machine-guns and, undamaged by our artillery fire, was also protected by strong wire entanglements. A heavy concentration of machine-gun fire caused many casualties, and held up our advance. His Lewis gun having come into action and silenced enemy guns in one direction, an enemy gun opened fire from another direction. Private Dalziel dashed at it and with his revolver, killed or captured the entire crew and gun, and allowed our advance to continue. He was severely wounded in the hand, but carried on and took part in the capture of the final objective. He twice went over open ground under heavy enemy artillery and machine-gun fire to secure ammunition, and though suffering from considerable loss of blood, he filled magazines and served his gun until severely wounded through the head. His magnificent bravery and devotion to duty was an inspiring example to all his comrades and his dash and unselfish courage at a critical time undoubtedly saved many lives and turned what would have been a serious check into a splendid success.
— The London Gazette, 17 August 1918
Dalziel's VC was the 1,000th such medal to be awarded. His wounds were so severe that his brain was exposed and he was evacuated to England for medical treatment.