Get your fingers used to being a lot more active, especially on the picking side--a critical ingredient of Danny's style is his ability to keep a steady pulse going on the bottom E string, while using his middle, ring and index fingers to pick out his lightning-fast lead lines. Spend some time listening to bluegrass, particularly banjo players--although Danny never made a recording along those lines, the genre's emphasis on fast, taut, but well-executed picking proved influential to his style.
Spend as much time as you can getting your scales down, and know your fretboard intimately, because you'll need those qualities to approach Danny's jaw-dropping speed. Precision and discipline form the hallmarks of Danny's style; you can clearly hear every note he played. It's those fast, but clean volleys that raise Danny's playing above the slurred phrasing that was so much in vogue during his '70s and '80s prime.
Learn to use finger and tone control combinations creatively to color your approach. For example, instead of using a pedal steel guitar--an instrument that Danny was fully capable of playing--he mimicked its sound by some judicious bending of the requisite strings, while subtly manipulating its tone controls. The same principle applied to his famous trick of playing slide guitar with a beer bottle, picking as seamlessly as ever--for a demonstration, check out a video clip of Danny's classic 1992 "Austin City Limits" TV show appearance.
Dedicate yourself to a melodic playing style. It's no accident that country players--such as the late Roy Nichols, who played lead guitar behind Merle Haggard for more than two decades--formed the keystone of Danny's guitar style, as well as jazzmen like Charlie Christian, Lenny Breau and Wes Montgomery. As guitar improvisation goes, both genres are similar; they require the player to follow the melody of a particular song.
Draw the appropriate distinctions between the types of guitars suited for a particular style. During the early phase of Danny's career, he learned toward Gibson models, particularly the Les Paul and Les Paul Customs for his the Redneck Jazz Explosion era (1978-79). As the '80s began, and the drive for perfect tone became all-consuming, Danny switched to the 1950s-era Fender Telecasters that became most prominently associated with him.
Use effects sparingly--Danny prided himself on his ability to get whatever sound he needed by using his fingertips and virtuoso techniques. Although he periodically experimented with devices--such as the Echoplex, a special digital delay unit that enabled him to effectively "play off" its repeated, echoed notes against himself--by and large, it's best to leave them alone.
Arm your guitar with Joe Barden pickups to have a shot at capturing Danny's tone--one that shunned distortion for a loud, yet bright, clean sound. According to Barden, his pickup production grew from a desire to impose greater sonic consistency on the devices--which translate the vibrations made by hitting the strings, and then go back as electrical signals through the amplifier.
Don't settle for less: experiment with different amplifiers, as Danny did throughout his career, to augment the tonal possibilities suggested by using the Barden pickups. Over the years, he experimented with a heavily modified Hammond organ Leslie cabinet, run through many different types of amplifier heads--typically, some type of Fender model. Later in his career, however, Danny reverted to a simpler setup, one that focused around the Tweed Twin.