Daly was born in Cabra, Dublin, and started his football career in Drumcondra with Stella Maris. His first senior club was Bohemians, for whom he scored in the UEFA Cup away to Köln in September 1972. In 1973, Manchester United manager Tommy Docherty paid Bohemians £20,000 for Daly's services. In Daly's first season at Old Trafford, the team was relegated to the Second Division after finishing 21st out of 22 teams. Despite this setback, Manchester United gained an instant return to the top flight with Daly being a key player. He continued his good form into the 1975–76 season, playing in 51 matches, including the 1976 FA Cup Final. Midway through the 1976–77 season, Daly was sold to Derby County for a fee of £175,000.