Born in Dublin, Ireland, Daly started his career at Irish amateur side Cherry Orchard, before signing for Stockport County in May 1998. At Stockport he made an immediate impact scoring regularly for the youth and reserve team. Daly began to make an impression on manager Andy Kilner during Stockport's pre-season tour of Scandinavia. After coming on a substitute against Landskrona BoIS, he impressed Kilner and the youngster was awarded with a start against Kristianstads, in which he scored his first senior goal after "lobbing" the Kristianstad keeper. The following season saw Daly become Stockport's second youngest player when he came off the bench to make his first team debut against Walsall. However, Daly failed to secure a regular place and he only managed to play in five matches in his first two seasons. Consequently, Daly had to wait until the 2001–02 season before he scored his first senior goal against Bolton Wanderers in the FA Cup. After scoring his first goal, Daly began to play in the Stockport team. However, this was disrupted when he was sent off after appearing to elbow Mitchell Thomas during Stockport's 2–0 defeat to Burnley. However, after receiving his ban, Daly returned to the side to face Wimbledon and responded by scoring his first league goal.