2004
Daniel first became acquainted with Lily when he agreed to help Kevin — the older guy who had coerced Lily into sleeping with him — look like a hero in her eyes. Their plan was to have someone "attack" Lily and then Kevin would "rescue" her. Unfortunately, the man they hired, Alex, drugged Lily and attempted to rape her. Kevin did manage to save her for real, but while Kev eventually confessed to the scheme, he and Daniel kept quiet about Daniel's role. Daniel and Lily soon fell for each other, but had to sneak around because of the rivalry between their respective mothers, Phyllis and Drucilla.

Winter/Spring, 2005
Things only got worse for the couple. Fourteen-year-old Cassie Newman had a huge crush on the older Daniel, and when he got drunk at a party, she decided to drive him home. While a passed-out Daniel rested in the backseat of the car, Cassie crashed the vehicle and both were hospitalized (she sustained serious injuries, while he escaped with some bruises). Daniel was accused of drunk driving, but couldn't remember what happened. Lily brought him food and cared for him while he hid out in the Abbott playhouse. Meanwhile, a delirious Cassie tried to tell everyone that he wasn't responsible for the accident, but she died before she could get her message out. Daniel panicked and fled town with Lily.

Summer, 2005
The couple made it to California and got in the spirit of being on the run together. Daniel began to remember the night of the accident, but didn't recall being the driver. Cassie's dad, Nick, and Phyllis ultimately tracked them down. Daniel was thrown in jail; Lily got into trouble for aiding and abetting a fugitive. Daniel was about to be sent to prison when at the last minute, Nick gave his daughter's clothes to the court to prove that Cassie was driving that evening.