Daniel in rabbinic literature
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According to rabbinical tradition Daniel was of royal descent; and his fate, together with that of his three friends, Hananiah, Mishael, and Azariah, was foretold by the prophet Isaiah to King Hezekiah in these words, "and they shall be eunuchs in the palace of the king of Babylon".Isaiah 39:7 (Talmud tractate Sanhedrin 93b; Pirke de Rabbi Eliezer lii).
According to this view, Daniel and his friends were eunuchs, and were consequently able to prove the groundlessness of charges of immorality brought against them, which had almost caused their death at the hands of the king. It was said of Daniel, "If he were in one scale of the balance and all the wise men of the heathens in the other, he would outweigh them all" (see Yoma 77a).
Nebuchadnezzar admired Daniel greatly, although the latter refused the proffered divine honors, thus distinguishing himself favorably from his contemporary Hiram (the "prince of Tyre" Ezekiel 28), who demanded honor as a god (Genesis Rabba xcvi.).
The "Wise Courtier"
Similarities between the story of Daniel and the tale of Joseph in Egypt have long been recognized. They belong to a type of story known as a "court tale", which is found in many different cultures. Typically, a person of relatively low status is the hero. He is generally falsely imprisoned, solves a puzzle for the king, and is rewarded.
This is not to imply that the story is fictitious; but that certain details were emphasized in order to make the story fit into a particular plot line and make the tale recognizable to the reader. L.M. Wills points out the use of this plot line in narratives describing success in the Diaspora, where it was important to emphasize Jewish wisdom and statecraft during periods of foreign domination in order to strengthen the sense of worth and ethnic pride of the Jewish people.
Daniel and Nebuchadnezzar
The rabbis had difficulty reconciling Daniel's concern and apparent friendliness towards the man who had destroyed the Temple. They handled this in two ways. When Daniel explains to Nebuchadnezzar the dream of the tree that was cut down, the rabbis viewed it in the context of Isaiah 56:1, which is sometimes rendered "Do what is right, and give alms." The midrash explains that Daniel advised him (in Daniel 4:24), to atone for his sins by good deeds, and for his misdeeds by kindness to the poor. This was because Daniel knew that many of the Jewish exiles were starving.
When, in Daniel 4:17, Daniel says, "My lord, this dream should be for your enemies, and its meaning for your foes," the rabbis conclude that this is addressed to God, rather than king Nebuchadnezzar; otherwise it could be interpreted as favoring Nebuchadnezzar over Israel.
The fiery furnace
Daniel denied himself much in the matter of food, since he would not partake of the wine and oil of the heathens (Ab. Zarah 36a). Daniel was not forced, as were his three friends, to worship the idol which Nebuchadnezzar set up; for the king, who well knew that Daniel would rather be cast into the fiery furnace than commit idolatry, sent him away from Babylon so he would not be forced to condemn him. Furthermore, it was God's intention to cause the three men to be taken out of the furnace during the absence of Daniel, so that their rescue should not be ascribed to the merit of the latter (Sanhedrin 93a; compare also Cant. R. vii. 8, and the Jewish Encyclopedia on Azariah in Rabbinical Literature).
No names of angels are mentioned until the Book of Daniel, where Michael and Gabriel make their appearance. This led the Rabbis to assert that the names of the angels were something that the returning exiles brought with them from Babylonia. Gabriel was believed to have been the angel who delivered Hananiah, Mishael, and Azariah from the fiery furnace.
Daniel and the idol
Nevertheless, the king endeavored to induce Daniel to worship the idol by trying to make him believe that it was something alive and real; and he ordered that there be placed in its mouth the frontlet (tzitz) of the high priest, on which was written the name of God; and since this name possessed the miraculous power of enabling inanimate things to speak, the idol could utter the words "I am thy god." Daniel, however, was not to be so easily deceived. Asking permission to kiss the idol on the mouth, he stepped before it and conjured the frontlet in the following words: "Although I am only a man of flesh and blood, yet I stand here as God's messenger. Take care that God's name is not desecrated by you, and thus I command you to follow me." While he was kissing the idol the frontlet passed from the idol's mouth into his. When Nebuchadnezzar, as usual, sent for musicians to give songs of praise to the idol, he noticed that Daniel had silenced it (Cant. R. vii. 9). 
In the lions' den
Daniel's success at court naturally excited the envy and ill will of the Babylonians, who gathered in a mob and threatened the king and his house if he did not deliver Daniel to them. The king was powerless to resist, and the people took Daniel and threw him into a den with seven famished lions. Daniel remained there unharmed for six days, being fed during that time by the prophet Habakkuk, whom an angel had in an instant transported from Judea to Babylon, holding him by the hair of his head. On the seventh day the king went to the den to bewail Daniel, and was astonished to find him alive.
Although Daniel was not forced to sin in any way, he was prepared to sacrifice his life rather than omit his prayers; hence it was easy for his enemies to convict him of having violated the royal order. While he was at prayer his enemies entered his room, and watched to see whether the accusations against him could be substantiated, as the king did not believe them. Daniel did not omit his "Minchah" prayer. Notwithstanding his friendship for Daniel, the king listened to the accusations of the nobles, and condemned him to be cast into the den of lions. The mouth of the den was closed with a huge stone, which had rolled of itself from Palestine to Babylon for that purpose. Upon this stone sat an angel in the shape of a lion, so that Daniel's enemies might not harass him. (Midrash Tehillim xxiv., lxvi.)
Daniel's enemies insisted that the lions were tame because they were not hungry, whereupon the king commanded that the accusers themselves spend a night with the beasts. As a result the enemies of Daniel, numbering 122, with their wives and children, making a total of 366 persons, were torn by 1,469 lions. (Midrash Tehillim l.c.)
Although Daniel was no prophet, God held him worthy to receive the revelation of the destiny of Israel, even to the Day of Judgment, thus distinguishing him from his friends, the prophets Haggai, Zechariah, and Malachi, who had no visions.Daniel 10:7 Daniel, however, forgot the "end" revealed to him, after an angel had shown him everything. (Genesis Rabba xcviii. 2)
- JewishEncyclopedia.com - DANIEL
- Ha-Kohen, Shemuel and Kiel, Yehudah. Da'at Mikra - Daniel (Jerusalem: Mossad Harav Kook, 1994) pp. 19-20, 56
- Ron, Zvi. "The 'Wise Courtier' in Rabbinic Literature", The Jewish Bible Quarterly, Vol. 39, No. 3, 2011
- Wills, L. M., The Jew in the Court of the Foreign King, (Minneapolis: Fortress, 1990)
- Tanhuma, Mishpatim,4
- Henze, M. H., The Madness of King Nebuchadnezzar, p.109, BRILL, 1999, ISBN 9789004114210
- Henze, p.111.
- "Angels in the Talmud", Jewish Heritage Online Magazine
- Henze, M. H., The Madness of King Nebuchadnezzar: The Ancient Near Eastern Origins and Early History of Interpretation of Daniel 4, BRILL, 1999, ISBN 9789004114210