The dam methylase has three different functions:
1. Correction replication errors, since the new DNA molecule is only hemimethylated (the old strand is methylated, the newly synthesized is not). Since the proof-reading only takes place on the new strand, errors introduced during replication can be corrected.
2. Regulation of replication: The ori of the chromosome is methylated to ensure that is only replicated once.
3. Regulation of transcription: Methylation of GATC sequences promote the transcription of genes.
For further details see the references.
References:
1. The great GATC: DNA methylation in E. coli
2. The dam and dcm strains of Escherichia coli--a review.
3. Dam methylation: coordinating cellular processes.