Depending on the context, it can express surprise or admiration, or ironically the opposite of that. If you want an English traduction, you can imagine the other person is saying "wow", "you don't say", "geez", or something like that.
- [...] et quand j'ai mis une droite à l'ours, il s'est enfui !
- Bah dis donc !
- [...] and when I punched the bear, it ran away!
Since it's a rather versatile expression mostly used orally, it's rather hard to be more specific without more precise context, intonation...