In February 2005, Daly signed for Hartlepool, where he would stay for the next two years. Daly's scored his first goal for Hartlepool against Bournemouth, which helped seal Hartlepool a play-off spot. Daly's most important goal came weeks later in the League 1 Play-off Final against Sheffield Wednesday, when he scored with his first touch after coming on as a substitute to put Hartlepool in the lead. However, Hartlepool would later end up losing that match but the goal will be remembered as the goal that almost sent Hartlepool into the Championship. Daly would struggle to feature for the club the following season and was sent on loan to Bury. In the 2006–07 season, Daly would at first again struggle to hold down a first team spot. However, he cemented his place in Hartlepool's record books with a remarkable scoring spree of seven goals in a week (three games), including his first hat-trick of his professional career against Wrexham on 30 September 2006. After this Daly would struggle to refind his form and was surplus to requirements after Danny Wilson signed Richie Barker.