When Danny was a beat cop, his future ex-wife, Rachel Edwards, hit his car. As he puts it, "the driving lessons turned into dates, and dates turned into a two bed room, and she (Rachel) woke up married to a cop." Later, they had a daughter named Grace. It is not known what happened between them, but Danny and Rachel ended up having a divorce. When his now ex-wife remarried and moved to Hawaii, Danny reluctantly went along to Hawaii, to be able to see to his daughter.
Rachel has a somewhat mutually antagonistic relationship with her ex through much of S1. She has primary custody of their daughter, Grace. It is implied the danger of Danny's chosen career may have been a factor in their divorce. Her first appearance was in Heihei where Danny and Steve used her house for a stakeout.
In the season finale, Rachel and Danny are revealed to be having an affair.
Rachel reconciles with Stan and gives birth to a baby boy. She and Danny remain friends.
In the finale, Rachel and Stan are planning to move to Las Vegas.
Rachel and Danny are in an ongoing battle over her plan to move to Nevada to be with Stan. The court decides Grace must stay in Hawaii.