To do so they've lured the Doctor back in time, they've captured his TARDIS to give him incentive to be cooperative, and they've set up a little game for Jamie to go through. The game is "Rescue the Beautiful Princess". All through the exercise the Daleks are recording his moves and thoughts and emotions, analyzing it into their computers, and with the Doctors help they're distilling down the Human Factor. Along the way Jamie meets up with Victoria Waterfield who will be important to the show for a year or so.
The theme of this story is the quest for transformative knowledge. The Daleks had been brought to earth by a couple meddling amateur scientists, Waterfield and Maxtible, who had been experimenting with Static Electricity. Maxtible especially was consumed with the quest for Alchemical powers such as the ability to transform base metals to Gold. The Daleks goal in this story was a different transformative knowledge, namely that which would make them even more invincible and able to destroy the Humans.
Eventually the experiment ends and all go to Skaro. They meet the Emporer Dalek and are being held captive. The Evil plan of the Daleks is for the Doctor to spread the Dalek Factor throughout all of Humanities history. The Dalek Factor? The unspoken plan of the Daleks was not to collect the Human Factor and incorporate that into themselves, but to use this to identify what makes them uniquely Dalek so they can reinforce that part of themselves. At the same time the Doctor had impregnated three Daleks with the Human Factor and we have several weirdo scenes of Daleks playing games and acting like children.
Eventually the Human/Daleks become rebellious and through some subterfuge the Doctor is able to apply the Human Factor to a large number of Daleks. That incites a riot among the Daleks and the whole city is destroyed.