Officials said he rang the doorbell at the Fabeltjesland nursery at 1000 local time (0900 GMT) and told staff he needed some information.
When they opened the door, he ran in and began attacking three of the infants.
"He quickly pulled out a knife and started using it on the children," said local prosecutor Christian Du Four.
"He then went up to another floor and started doing the same thing again."
The prosecutor said the man's face had been smeared with a white colouring but his eyes had been blackened.
He escaped from the scene by bicycle but was arrested at a supermarket.
Residents told the BBC that the town was stunned.
Damien Vernon, a 43-year-old from Ireland who has lived in Dendermonde for five years, said: "It's just a sad day here, we're a small town and the crime figures are low here, we're just in shock."
The creche looks after 18 children aged three and under.
Police have been showing parents digital photographs of the youngsters taken to hospital, asking them to identify their children.
The children and staff from the nursery who escaped without injury are now receiving counselling.
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