But it could be a toe, you understand (5)
I believe the answer is:
digit
'be a toe you understand' is the definition.
I can't judge whether this definition defines the answer.
'but it' is the wordplay.
'but' becomes 'dig' (I can't explain this - if you can you should give a lot more credence to this answer).
'dig'+'it'='DIGIT'
'could' acts as a link.
Can you help me to learn more?
(Other definitions for digit that I've seen before include "a number less than ten" , "Single figure - finger" , "Single number" , "zero, one, two, three, four, five, six, seven, eight, or nine" , "One in ten, say" .)