Dalek-Humans are genetically engineered hybrids of Human and Dalek DNA. In the Doctor Who two-part story "Daleks in Manhattan/Evolution of the Daleks", the Cult of Skaro establishes a hidden laboratory beneath New York in 1930, conducting a "Final Experiment" that will ensure the survival of the near-extinct Dalek race. The Dalek-Humans are the end result of that experiment.
With the Dalek race on the verge of dying out forever, Dalek Sec and the members of the Cult of Skaro began to research new methods of ensuring their race's survival. They had to think radically and Sec declared that the next major step in their Final Experiment was to add Human DNA to the Dalek gene pool, a step that would grant the Daleks new perspective and make them more capable. To this end, Sec underwent a hybridisation process, merging with a human and emerging from the mechanical shell that all Daleks were bound to.
The Cult had gathered many captive humans to use in their experiment, which were divided into two categories. Those of low intelligence were converted into pig slaves, human-pig hybrids that functioned as primitive servants. Those of high intelligence were preserved for the hybridisation process. As the experiment progressed, Dalek Sec, overcome with new ideas and thought processes thanks to his human half, decided that the Daleks' future could only be secured if they discontinued their attitude of aggression and superiority. The Daleks' entire existence had revolved around warfare and conquest, but Sec had come to believe that this way of life was what was leading them to their own destruction and that they had to find more peaceful ways to secure their future. To ensure that the Daleks travelled down the right path, Sec reached out to the Daleks' oldest enemy for help: the renegade Time Lord known as the Doctor.
Sec, together with the Doctor, began to carry out the last stages of the Final Experiment: to bring the Dalek-Humans to life. The other Cult members, however, turned against Sec and stripped him of his authority, declaring that he was no longer a Dalek. The Doctor fled the laboratory and ascended the Empire State Building, climbing up to the mast on the roof. A gamma radiation storm was amassing above Manhattan and the lightning from the storm was to strike the mast which had been fitted with Dalekanium alloy plates. The Dalekanium would conduct the gamma energy into the laboratory below the ESB, which would charge up the dormant Dalek-Humans and bring them to life. When the lightning struck, the Doctor was tampering with the mast attempting to remove the Dalekanium plates. He failed to remove them and was caught in the lightning strike.
When the Dalek-Humans awoke, Dalek Caan took control of them and commanded them to find and exterminate the Doctor and his friends. They, along with Daleks Jast and Thay, cornered the Doctor inside a theatre. The Dalek-Humans were ordered to kill the Doctor, but the hybrids started to question these orders. As it turned out, when the Doctor was struck by the lightning, his Time Lord DNA was channelled through the Empire State Building and infused into the Dalek-Humans, making them part Time Lord. This caused the hybrids' programming to fail and they turned against the Daleks, opening fire on Thay and Jast and destroying them. Declaring the hybrids as failures, Dalek Caan activated a self-destruct protocol in the hybrids' brains that triggered an ultrasonic signal, killing the hybrids.
The Dalek-Human hybrids appear to be human outwardly, but with a grimy grey skin, as though they are dead. The only exception to this is the first Dalek-Human hybrid Dalek Sec, who was originally a pure Dalek that merged with a human being. Sec gained a humanoid form with mottled brown skin and his head still closely resembled that of the Dalek mutant form: three small tentacles extended from either side of his head, he had a single eye, no visible nose, and an enlarged and exposed brain.
The Dalek-Human soldiers were also infused with Time Lord DNA as a result of the Doctor's interference. It is unknown if the hybrids inherited any specific racial traits of the Time Lords, though the additional DNA sequences interfered with the hybrids' mental conditioning, allowing them to disobey the Daleks' commands.
The full capabilities of the Dalek-Humans are unknown as they were destroyed shortly after their creation. Presumably, they were capable of any physical feats that normal humans can achieve and may have gained the Daleks' superior intellect. It is unknown if they inherited any biological traits of the Time Lords, though they apparently did not gain the ability to regenerate. The Dalek-Humans were also armed with Dalek gunsticks that had been modified to be wielded by hand. These weapons resembled human "tommy guns" that were popularly used in America during the early 20th century.