Lyric discussion by AwayFromSirens 

Cover art for Daniel lyrics by Bat for Lashes

In this song, the narrator has a crush on the fictional character Daniel Larusso. She watches The Karate Kid one summer, (wild blue skies) and falls in love with him, or the idea of him.
The "fires" might be her desire to be with him, and she has a dream that he takes her somewhere in a car and makes love to her. "When I run in the dark" is escaping into her imaginary world to be with him. She is lying awake one night and realizes that he isn't real, and she can't have him ("Goodbye bed") and feels lost and disconnected ("just kids in the eye of the storm") And she decides that she needs to keep searching for that "flame" that Daniel had, but in a real person. Basically, she starts looking for her real-life Daniel, and that feeling of this person you love being your home.

Beautiful, beautiful song. Everybody deserves a Daniel.