Place the compass on a flat surface and away from anything that might interfere with its magnetic field. Let it find North. Lift the gnomon. This is the part of a sundial that casts a shadow. Now point the gnomon to the North in the northern hemisphere, or to the South in the southern hemisphere. Adjust the angle for declination. Read the time.
FAST FORWARD TO 1:58 for sundial use.
Note: The compass points to magnetic north, and a correction must be made for magnetic deviation. Also, remember the sun travels 15º westward in one hour, and thus travels 1º westwards every four minutes.