The 73-year-old was making a safety guard for his circular saw when said blade cut through his index finger and the tip of his ring finger on his left hand.
"The pain was terrible," he told the Daily Mail. "Thankfully, I don't panic. I go completely the opposite - icy cold mentally - and everything goes in slow motion.
"I yanked my hand out and clenched my fist, slamming it to my chest just in case it was gushing blood. I didn't look at it. I couldn't. Coupled with the fact it hurt like hell, my first thought was, 'This could be the end of magic'."
Daniels has been forced to relearn his magic tricks with his right hand and some he will never be able to do again, but the husband of Debbie McGee has accepted that there are many others suffering more than him.
"It was a very big thing. Suddenly I just started to think about our soldiers," he said. "Those lads not only have my deepest sympathy, but they have my deepest admiration.
"Just suffering the bit I've lost and knowing how it's affected my life. At least I'll be able to adapt and continue working."
> Paul Daniels 'hospitalised after Sooty pizza sketch'
Watch Paul Daniels perform his famous Chop Cup trick below: