Oh, so it's not a relic of proto-Germanic interdental fricatives
(retained in English and Icelandic)?
No, that sound (which was, in fact, spelled _th_ till the 9th century)
became _d_, after the Proto-Germanic /d/ had become _t_ and the
Proto-Germanic /t/ had become _z_ and _Ã/ss_ (/ts/, /s:/). _Tal_ "valley" is
the same word as the _-dale_ element that's found in so many English place
names (Greendale, Sunnydale...), as well as Scandinavian surnames and
placenames in _-da(h)l_ and various _dalles_ in Normandy.
Funnily enough, this shift from _th_ to _d_ also happened in Frisian, Dutch
and Low German, which did not participate in the other two shifts I
mentioned (which are parts of the High German Consonant Shift).