By the 1986 season, McDaniel was in the starting lineup. In Tennessee's 27–23 loss to Mississippi State, he broke up three passes. In Tennessee's loss to Auburn, McDaniel registered a team-leading 13 tackles, including one in which he chased down running back Brent Fullwood to prevent what would have been a 96-yard touchdown run. He had an interception in each of Tennessee's last three games against Ole Miss, Kentucky and Vanderbilt. He finished the season with 68 tackles (45 solo) and 3 interceptions.