First Download and Install Daggerfall into any directory you want.
Elder Scrolls 2: Daggerfall Base Game for Free (DaggerfallSetup): https://wiwiki.wiwiland.net/index.php?title=Daggerfall_:_DaggerfallSetup_EN
Next, Install Daggerfall Unity into the same Folder.
Daggerfall Unity Engine - https://www.dfworkshop.net/projects/daggerfall-unity/live-builds/
To play the game, Run Daggerfall Unity's exe instead of regular Daggerfall from the Daggerfall Folder. Additionally be sure to go to the Advanced Options menu on the launcher and configure the game to your specs.
Almost ALL mods are installed into the following Folder in .DFMOD format:
DaggerfallUnity_Data\StreamingAssets\Mods
A FEW mods may have alternate installation instructions, but most are single files packaged in .DFMOD format that go in the above folder.
Mods I use in my playthrough:
Mountains and Hills Landscape Mod - https://forums.dfworkshop.net/viewtopic.php?f=27&t=1008
Distant Terrain - https://forums.dfworkshop.net/viewtopic.php?f=27&t=10
Click on Beds to Sleep - https://forums.dfworkshop.net/viewtopic.php?f=27&t=2298
Enhanced Sky - https://forums.dfworkshop.net/viewtopic.php?f=27&t=1542
World Map Replacer - https://forums.dfworkshop.net/viewtopic.php?f=27&t=1804
No Crickets at Night - https://forums.dfworkshop.net/viewtopic.php?f=27&t=1163
Archaeologists Mod (New Faction) - https://forums.dfworkshop.net/viewtopic.php?t=888
Silly but fun Airship mod in early production:
https://forums.dfworkshop.net/viewtopic.php?t=2324
Optional, will change your experience massively:
Real Time Fast Travel - https://forums.dfworkshop.net/viewtopic.php?f=27&t=1293
Can make the game harder but more fun, works great with Real Time Fast Travel:
Warm Ashes Enemy Spawn Mod - https://www.nexusmods.com/daggerfallunity/mods/6
D.R.E.A.M. overhauls textures, NPCs, and more. Unlike Normal Daggerfall Unity this has HIGH system requirements, do not install unless you have a good system: