The connection to Spider-Island is tenuous at best.

Mr. Negative, the Crime boss from China Town, spoke to a fortune teller who told him that Dagger would one day kill him.

So Mr. Negative and his goons attacked and captured Cloak and Dagger while they were separated and busy fighting the thousands of Spider-Men and Man-Spiders attacking New York.

But instead of trying to kill Dagger in order to prevent the prophecy from coming true, Mr. Negative decided to use his negative touch power on her in order to make her into the person who would kill him. She got the shadow powers and couldn't control them. Cloak begged Mr. Negative to reverse his powers as well so that he could give Dagger the light.

Then they kissed and destroyed a few city blocks.