1. [now obs.] A security or copy protection device for proprietary software consisting of a serialized EPROM and some drivers in a D-25 connector shell, which must be connected to an I/O port of the computer while the program is run. Programs that use a dongle query the port at startup and at programmed intervals thereafter, and terminate if it does not respond with the dongle's programmed validation code. Thus, users can make as many copies of the program as they want but must pay for each dongle. The first sighting of a dongle was in 1984, associated with a software product called PaperClip. The idea was clever, but it was initially a failure, as users disliked tying up a serial port this way. By 1993, dongles would typically pass data through the port and monitor for magic codes (and combinations of status lines) with minimal if any interference with devices further down the line — this innovation was necessary to allow daisy-chained dongles for multiple pieces of software. These devices have become rare as the industry has moved away from copy-protection schemes in general.
2. By extension, any physical electronic key or transferable ID required for a program to function. Common variations on this theme have used parallel or even joystick ports. See dongle-disk.
3. An adaptor cable mating a special edge-type connector on a PCMCIA or on-board Ethernet card to a standard 8p8c Ethernet jack. This usage seems to have surfaced in 1999 and is now dominant. Laptop owners curse these things because they're notoriously easy to lose and the vendors commonly charge extortionate prices for replacements.
[Note: in early 1992, advertising copy from Rainbow Technologies (a manufacturer of dongles) included a claim that the word derived from “Don Gall”, allegedly the inventor of the device. The company's receptionist will cheerfully tell you that the story is a myth invented for the ad copy. Nevertheless, I expect it to haunt my life as a lexicographer for at least the next ten years. :-( —ESR]