A night latch is a second short notch in the pan shank. You set the dog into the factory notch and lower the pan until the dog slips into the "new" notch with an distinct click. The original idea was for setting traps at night to the same set; ergo night latch.
Today many refer to all secondary notchs as night latches. However, a "night latch" with a depth of no more than a dime's thickness and a couple too four pounds pan tension are frequently used for land trapping. This set up allows for a crisp firing trap ...no, or very little noticeable movement in the pan before firing. All of my traps are notched and I wouldn't put a trap into use without a latch.
To make a latch all you need is a mill file. About 1/16 too an 1/8 inch from the top of the pan shank carefully file away the shank leaving a "lip" at the top about the thickness of a dime. There are other things you can do to tweak things a bit. To take the slop out of the pan you can redrill the pan and post and use a more exact size screw. You should insert a thin brass washer on each side of the pan shank between the shank and post for better tensioning. You should file the dog face flush. Also, instead of filing a square notch you can angle it to form more of a gun sear type arrangement.
Hope this helps some!