Use Shotgun
The best place to fight Saddler is on the catwalk where Ada starts. Press the dodge buttons that appear on the screen right before he strikes you; Saddler is fast, but if you keep dodging him you won't take any damage. Use a shotgun against him. Do not use an automatic weapon, such as the TMP, as he will shoot your bullets back at you.
Function
Get within 10 paces of Saddler. Aim at his head. Shoot him when he raises his arm to hit you. This wounds Saddler and causes him to show you the large yellow eye in his mouth. Walk up to him and when the game prompts you to, press the buttons on the screen to knife his eye.You must knife his eye approximately seven times.
Fun Fact
If you stand right beside Saddler, dodge his every attack and knife him about 30 times, he will eventually die without Ada needing to knife his eye.