Daughter hugged by proper dandy (4)
I believe the answer is:
dude
'dandy' is the definition.
('dude' can be a synonym of 'dandy')
'daughter hugged by proper' is the wordplay.
'daughter' becomes 'd'.
'hugged by' means one lot of letters goes inside another (I've seen this in other clues).
'proper' becomes 'due' (I've seen this before).
'd' put within 'due' is 'DUDE'.
(Other definitions for dude that I've seen before include "Man (US colloq.)" , "Stylish and confidant man" , "Stylish and affected man" , "American bloke" , "Fellow" .)