Mr McDonagh, who was 28 and from Castledawson, was assaulted outside a bar last Sunday morning.
The 33-year-woman was detained in Banbridge on Saturday morning and is being questioned on suspicion of withholding information.
A 24-year-old man appeared in court on Thursday charged with murder.
Police investigating the murder of James McDonagh in Toomebridge last weekend have arrested a woman.